Key facts
- Alphabet CEO Sundar Pichai defended Google's AI strategy during an earnings call.
- Google delayed the release of its flagship AI model, Gemini 3.5 Pro.
- Pichai highlighted Gemini Flash as a faster, more cost-effective model powering various applications.
- Google unveiled Gemini 3.5 Flash-Lite and a cybersecurity-focused Flash Cyber model.
- Alphabet raised its capital expenditure plans by $15 billion.
- Google's shares fell more than 3% in after-hours trading.
Alphabet CEO Sundar Pichai used the company's latest earnings call to defend Google's artificial intelligence strategy, addressing concerns that the company is losing ground to rivals like OpenAI and Anthropic. Investors have grown uneasy following the delay of Gemini 3.5 Pro, a model expected to bolster Google's capabilities in AI coding and autonomous agents.
Pichai acknowledged that coding and agentic tasks are areas where Google needs to improve but stressed that the company still possesses frontier models and is committed to staying at the cutting edge. He emphasized the success of Gemini Flash, a faster and cheaper model that powers numerous applications, and highlighted recent improvements in coding benchmarks for Gemini 3.5 Flash. Pichai also indicated that Gemini 4 is under development with a roadmap for monthly model releases.
Despite strong cloud growth of 82%, Alphabet's shares fell over 3% in after-hours trading, reflecting ongoing investor concerns about AI leadership and rising capital costs. The company raised its capital expenditure plans by $15 billion to a range of $195 billion to $205 billion.