Alphabet Shares Fall on Report of Gemini 3.5 Pro AI Model Delay

Alphabet shares fell 4% on Thursday after a report indicated the company's flagship artificial intelligence model has experienced a launch delay. Bloomberg reported that Google's Gemini 3.5 Pro AI model is months behind schedule due to efforts to improve its performance.

The report stated that the model's coding capabilities did not meet internal expectations. This comes at a time when competitors such as OpenAI and Meta have recently debuted new AI models that outperform Google's current offerings in generating software code.

Alphabet initially announced Gemini 3.5 Pro in May during its annual Google I/O developer conference, stating at the time that the model was in internal use but not ready for a broader rollout until the following month.

An Alphabet spokesperson told CNBC in an emailed statement that the company is "shipping quickly across a wide range of models while keeping them highly cost-effective for customers." The spokesperson added, "We’re currently testing 3.5 Pro, an upgraded Flash model, and other models with partners, and we’re productively engaged with the U.S. government."

Code generation has become a major use case for AI model providers, with Meta recently launching its Muse Spark 1.1 model and OpenAI releasing its GPT-5.6 Sol, which CEO Sam Altman described as stronger for agentic and coding tasks.