Alphabet's Gemini delay, spending worries loom over earnings
AI model delay and spending scrutiny
Alphabet faces heightened scrutiny from investors as a delay in the launch of a model key to its AI ambitions adds to worries over the payoff from massive data-center spending, months after raising expectations with a blockbuster quarter for cloud sales.
The Google parent GOOGL.O — set to report second-quarter results on Wednesday — has delayed from June the launch of its next flagship model, Gemini 3.5 Pro, built especially to catch up with rivals in the lucrative market for AI coding tools and agentic AI tasks.
The setback has raised concerns as Chinese open-source models increasingly challenge top U.S. labs for customers amid growing worries about steep AI bills that have also fanned fears that Big Tech could be over-building capacity.
"While Google is missing the boat on AI coding and that's a very real growing concern ... Google's strategy is all about the ecosystem," said Dave Wagner, portfolio manager at Aptus Capital Advisors.
