Alphabet Inc. (NASDAQ: GOOGL) shares fell 4.52% to $354.17 on Thursday following reports of delays in the rollout of its AI model, Gemini 3.5 Pro. The delays are attributed to ongoing challenges in improving the model's coding capabilities, an area where competitors like OpenAI and Anthropic have gained an advantage, according to a report by Bloomberg.
Details of the Delay
The release of Gemini 3.5 Pro has been postponed by several months as Google engineers work to enhance its performance. Sources familiar with the situation indicated that the complexity of organizational efforts at Google is a significant factor in the slowdown. Multiple teams, including those from DeepMind, Cloud, Android, and Search, are reportedly developing AI coding tools, leading to overlapping initiatives and slower execution. Recent updates aimed at improving Gemini’s coding performance have not met expectations, further widening the gap with rival offerings.
Company Response
In response to the concerns, a Google spokesperson stated,
We’re shipping quickly across a wide range of models while keeping them highly cost-effective for customers.
The spokesperson also mentioned that the company is actively testing the 3.5 Pro model and engaging with U.S. government partners on broader frameworks for AI model testing.
Market sentiment has been affected by these developments, with investors expressing skepticism about Google's ability to retain its competitive edge in the AI sector.
The decline in Alphabet's stock could impact investor confidence in tech stocks, particularly in the AI sector, as delays in product releases may lead to concerns over future growth and innovation. Investors will watch for updates on the Gemini model's progress and any announcements regarding its release schedule.