Alphabet shares fall on report its most powerful AI model Gemini 3.5 Pro is delayed

Published Jul 16, 07:07 PM UTC

Alphabet shares dropped 4% on July 16, 2026, following a Bloomberg report that the company's flagship AI model, Gemini 3.5 Pro, is months behind schedule due to performance issues, particularly in coding capabilities. The model was announced at Google I/O in May 2026 with an expected broader rollout in June, but internal testing fell short of expectations. This delay comes as competitors OpenAI and Meta recently released new AI models (GPT-5.6 Sol and Muse Spark 1.1) that outperform Google's current offerings in code generation. An Alphabet spokesperson stated the company is testing 3.5 Pro with partners and the U.S. government, emphasizing cost-effectiveness and rapid shipping across multiple models.