Background
<cite index="11-2">Alphabet's Google is months behind schedule on delivering Gemini 3.5 Pro, its most powerful flagship large language model (LLM), because the company has been taking time to try to improve its capabilities, particularly in coding.</cite> The delay was first reported by Bloomberg on 16 July 2026, citing people familiar with the matter.
What Was Promised
<cite index="6-4">Google chief executive Sundar Pichai announced at the company's I/O developer conference in May that Gemini 3.5 Pro would launch in June.</cite> <cite index="1-1">At I/O 2026, Google announced Gemini 3.5 Flash and said the Pro version would arrive in June.</cite> <cite index="3-3">Until Pro ships, Flash is the only model Google has released in the 3.5 series.</cite>
The Coding Gap
<cite index="2-4">A Bloomberg report, citing ten current and former employees, reveals that Google reset and updated its underlying training data in late June to fix coding performance issues on Gemini 3.5 Pro.</cite> <cite index="2-5">The internal results were once again disappointing.</cite> <cite index="11-3">The delay has been a source of frustration for Google engineers, artificial intelligence (AI) researchers, and managers, many of whom are concerned the company risks losing an edge in the market as rivals Anthropic and OpenAI produce models that exceed Gemini's capabilities.</cite>
<cite index="3-14">In May, Pichai acknowledged Google was "a bit behind" the frontier on agentic coding, which he tied to Google not having the kind of developer-facing coding product that generates data for competitors.</cite>
Organizational Complexity
<cite index="11-4">Google has multiple layers of stakeholders involved in preparing models for release, working to weave AI across a vast product portfolio, including Search, Maps, and YouTube, which can cause delays.</cite> <cite index="7-7">To address the disarray, Google is consolidating its AI coding initiatives under Chief AI Architect Koray Kavukcuoglu and establishing a specialized coding team within DeepMind, headed by research engineer Sebastian Borgeaud.</cite>
<cite index="1-7">As of April, 75% of all new code at Google is AI-generated and approved by engineers, up from 50% last fall.</cite> Yet that internal adoption has not translated into competitive external benchmarks for Gemini 3.5 Pro.
Competitive Pressure
<cite index="5-16,5-17">In recent weeks, both OpenAI and Meta Platforms have launched models designed to compete in code generation. OpenAI released GPT-5.6 Sol, which chief executive Sam Altman said is 54% more token-efficient on agentic coding tasks.</cite> <cite index="2-9,2-10">Enterprise customers using the lighter Gemini 3.5 Flash model have delivered mixed reviews — educational platform Platzi has explicitly switched to Anthropic's models, citing slower performance, structured data errors, and high pricing.</cite>
<cite index="5-14,5-15">Code generation has rapidly become one of the most commercially valuable use cases for large language models, with developers increasingly relying on AI to write, debug, and optimize software, turning coding prowess into a frontline battleground for cloud revenue and enterprise adoption.</cite>
Google's Official Position
<cite index="15-17,15-18">A Google spokesperson told Reuters: "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." The spokesperson added: "We're shipping quickly across a wide range of models while keeping them highly cost-effective for customers."</cite>
Market and Financial Impact
<cite index="5-3">The delay, first reported by Bloomberg, sent Alphabet shares down as much as 4% and raised concerns that the company is losing ground to OpenAI and Meta, which have recently launched models with superior code-generation performance.</cite> <cite index="5-6">The setback arrives just ahead of Alphabet's Q2 earnings on July 22, where investors will scrutinize Gemini's user growth, AI capital spending, and Google Cloud revenue for signs that the company's massive AI investments are paying off.</cite>
<cite index="5-11">Google Cloud revenue surged 63% in the first quarter to $20 billion, and the backlog nearly doubled sequentially to more than $460 billion</cite> — figures executives will likely invoke to reframe the Gemini narrative at the upcoming earnings call.