Alphabet shares fall on report its most powerful AI model Gemini 3.5 Pro is delayed

Alphabet stock shares dropped 4% on Thursday following reports that the release of the company's new AI model, Gemini 3.5 Pro, is delayed. Internal performance tests reportedly indicated the model failed to meet expectations for coding tasks. This comes at a competitive time in the industry as rivals like OpenAI and Meta continue to launch updated models that excel in software generation.

Alphabet originally introduced the Gemini 3.5 Pro model during its annual developer conference in May. At that time, the company indicated the model was in use internally and planned for a wider release the following month. Current reports suggest that the push for higher performance is the primary factor behind the revised schedule.

An official spokesperson for Alphabet noted that the company is shipping models quickly while maintaining cost-effectiveness for users. The firm is currently testing 3.5 Pro and an upgraded Flash model with various partners.

Coding capability has emerged as a major benchmark for tech companies. Recent releases from Meta and OpenAI focus heavily on agentic coding tasks, increasing pressure on competitors to deliver high-quality output. The market reaction reflects current investor sensitivity toward the pace of innovation within the sector.