Alphabet Inc. has delayed its flagship Gemini 3.5 Pro model past its June release target to improve coding performance.
Alphabet shares fell nearly 3% following reports of the product delay.
Internal teams and engineers expressed frustration over fears of losing market advantage to OpenAI and Anthropic.
Alphabet Inc. is months behind schedule in delivering Gemini 3.5 Pro, its flagship large language model. The company is taking extra time to improve the system's capabilities, specifically its coding performance, Bloomberg reported on Thursday.
Alphabet CEO Sundar Pichai announced at the May I/O developer conference that the model was due for a June release. The delay means Google misses this target timeline.
4 July 2026
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Following the product delay report, the shares of Alphabet dropped nearly 3%.
Internal Frustration and Hurdles
The schedule slip has generated frustration among Google engineers, artificial intelligence researchers and managers. Some current and former employees noted that the delay would risk losing the company's current market advantage. They fear rivals Anthropic and OpenAI are producing models that exceed the capabilities of Gemini.
Google updated the data used to train Gemini late last month to boost its performance. The resulting outputs fell short of internal expectations.
Multiple layers of stakeholders complicate the release process. Teams must integrate the artificial intelligence technology across Google's extensive product portfolio, which includes Search, Maps and YouTube, as per the Bloomberg report.
"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," a company spokesperson told Reuters.
"We're shipping quickly across a wide range of models while keeping them highly cost-effective for customers," he added.
Competitive Landscape Shifts
The Google delay occurs as competitors navigate their own rollout challenges. OpenAI launched GPT-5.6, its most advanced model, last week. The release followed a delay prompted by US government requests regarding national security concerns over the potential misuse of powerful technology.
Anthropic faced similar regulatory hurdles. The company disabled its most advanced models, Mythos 5 and Fable 5, for all users following a June 12 US export control order. That mandate also cited national security concerns.
The export curbs on Anthropic were lifted in late June. The restrictions ended after the company integrated additional safeguards into its systems.
US Commerce Secretary Howard Lutnick explained that the relief was a result of Anthropic's readiness to proactively detect and address security risks associated with its AI models and to comply with the US government's protocols and standards.
