Gemini 3.5 Pro Delayed Months; Alphabet Sheds $200B in Market Cap

Summary: Google's next flagship AI model, Gemini 3.5 Pro, is months behind schedule after coding and reasoning performance missed internal targets.

Key facts

• The model was widely expected on July 17; release has slipped several months with no new target date announced
• Alphabet shares fell 4.4% on July 16, wiping out roughly $200 billion in market capitalization
• Google added programming-related training data in late June but the update failed to close the performance gap
• OpenAI GPT-5.6 Sol and recent Meta models already outperform Google's current offerings on coding benchmarks

Why it matters

Two consecutive delays since Google I/O 2026 are rattling investor confidence in Alphabet's AI execution. Every month of slippage gives OpenAI and Meta more time to lock in enterprise customers and developer mindshare — a gap that is increasingly difficult to reverse in a winner-take-most market.

More

• Alphabet stock report — CNBC
• Performance analysis — BusinessToday