Alphabet Stock Falls 4% as Google Delays Gemini 3.5 Pro AI Model

Alphabet shares fell 4% on Thursday following reports that Google delayed its Gemini 3.5 Pro artificial intelligence model. Bloomberg sources familiar with the matter stated the model is now months behind schedule due to coding performance falling short of internal expectations. The delay occurs as competition intensifies in the AI sector, with rivals OpenAI and Meta recently unveiling new models designed for stronger software development performance.

Alphabet Stock Records 4% Decline on AI Model Delay

Alphabet shares dropped 4% on Thursday after Bloomberg reported the Gemini 3.5 Pro model delay. The stock experienced an additional 1.5% decline in pre-market trading. According to Bloomberg sources, the model's coding capabilities have not met Google's internal benchmarks, prompting the company to extend development timelines.

Google first introduced Gemini 3.5 Pro at its annual Google I/O developer conference in May. The company announced the model was being used internally but required further testing before public release. The original rollout was expected to begin the following month, though current reports indicate the timeline has shifted.

Meta and OpenAI Launch Competing AI Models

Meta recently introduced its Muse Spark 1.1 AI model. Meta's AI chief Alexandr Wang described it as the company's strongest model for agentic and coding-related tasks. OpenAI launched GPT-5.6 Sol, with CEO Sam Altman stating the model delivers 54% greater token efficiency on agentic coding workloads.

Google Confirms Gemini 3.5 Pro Testing Underway

An Alphabet spokesperson told CNBC the company remains focused on delivering advanced AI models while maintaining cost-effectiveness for customers. The spokesperson confirmed Google is currently testing Gemini 3.5 Pro, described as an upgraded Flash model, along with several other AI systems in partnership with external collaborators.

FAQ

Why did Alphabet stock fall 4% on Thursday? Alphabet stock fell 4% after Bloomberg reported Google delayed its Gemini 3.5 Pro AI model. Sources stated the model is months behind schedule because its coding capabilities have not met Google's internal expectations.

What competing AI models did Meta and OpenAI recently launch? Meta launched Muse Spark 1.1, which its AI chief described as the company's strongest model for agentic and coding tasks. OpenAI launched GPT-5.6 Sol, with CEO Sam Altman claiming it is 54% more token efficient on agentic coding workloads.