Pichai's AI Model Delay Sparks Credibility Crisis at Alphabet

Alphabet's Sundar Pichai is facing a credibility crisis as his promised AI model, Gemini 3.5 Pro, remains undelivered. This comes despite Google Cloud growing 82% to $24.77 billion in the second quarter, and the company's engineers preferring Gemini 3.8 Flash over Anthropic's Claude Opus for coding tasks.

Pichai committed to releasing Gemini 3.5 Pro in June, but prediction markets had already resolved against a release by August 31, 2026. A new model, Gemini 3.8 Flash, is now expected to be released soon, which Google engineers reportedly prefer over Claude Opus for internal work.

However, this development does not address the underlying issue of Pichai's delayed flagship. The missed deadline and reorganization at DeepMind have raised concerns about the company's ability to deliver on its promises, particularly in the competitive AI market.

Despite these challenges, Alphabet remains a strong contender with a P/E ratio of 17 and analyst buy ratings from 58 out of 64 analysts. The company's shares are trading cheaper than Microsoft, Meta, and Amazon, with a target price of $428.07.