Alphabet Falls 4.44% on Report of Gemini 3.5 Pro Launch Delay

Coding Upgrade Effort Hits Obstacles

Concerns Mount Over Google’s AI Edge

Alphabet Inc. shares fell more than 4% after a report said Google’s next-generation artificial intelligence model, Gemini 3.5 Pro, may be delayed by several months. The setback heightened concerns about Google’s competitive position as the race to release new AI models intensifies.

Alphabet shares closed down 4.44% at $354.46 in regular trading on July 16, Bloomberg reported. The drop followed a report that the launch of the company’s next-generation AI model had been delayed. At its annual I/O developer conference in May, Google unveiled the lightweight Gemini 3.5 Flash model and said the full Gemini 3.5 Pro version would arrive in June. Bloomberg, citing people familiar with the matter, reported that there is still no update on the Gemini 3.5 Pro launch. The delay is tied to difficulties improving Gemini’s coding capabilities. Google also updated the model’s training data late last month to boost coding performance, but the effort produced disappointing results, according to the report.

Competition in AI models is heating up, with Anthropic resuming the public rollout of Claude Mythos 5 and Fable 5 this month. SpaceXAI’s Grok 4.5, OpenAI’s GPT-5.6 Sol and Meta’s Muse Spark 1.1 have also been released in succession.

Bloomberg reported that some inside Google worry the company could lose the upper hand in the AI race if Gemini cannot match rival models in coding performance. Some researchers have also left for competitors including Anthropic. AI benchmarking firm Artificial Analysis gave Google’s Gemini 3.5 Flash an intelligence score of 50, ranking it 12th behind Claude Fable 5 at 60 and GPT-5.6 Sol at 59.

Some have also pointed to Google’s complex organizational structure as a reason Gemini’s development has slowed. Unlike rivals focused only on AI model development, Google must juggle competing interests across a broad product lineup including search, cloud, maps and YouTube, making quick decision-making more difficult.

Ahn Sang-mi, Hankyung.com reporter saramin@hankyung.com