Google CEO Sundar Pichai Defends AI Strategy Amid Gemini Delays and Rising Competition

By: Harsh Vardhan

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Updated on: 23-Jul-2026 04:00 PM

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Google CEO Sundar Pichai addressed concerns about the company's position in artificial intelligence during Alphabet's latest earnings call. He assured investors that Google is not lagging behind rivals, despite recent delays and challenges with its Gemini AI models. Pichai emphasized that the upcoming Gemini 4 model represents a significant advancement and will help Google compete at the forefront of AI development.

Key Highlights

• Google CEO Sundar Pichai says Gemini 4 will help Google compete in advanced AI tasks.
• Gemini 3.5 Pro delayed after missing internal goals in coding and agentic tasks.
• Gemini now has 950 million monthly active users, up from 750 million in Q4 2025.
• Google Cloud revenue rose 82 percent year-on-year to $24.8 billion.
• Alphabet shares fell over 3 percent after earnings report, down 9 percent since April.

Google's AI Progress and Challenges

Pichai described Gemini 4 as a "very ambitious effort" and noted that it is much larger than previous models. He stated that the size and scale of Gemini 4 would enable Google to match or surpass competitors in the AI field. Larger AI models often perform better, but companies like Google and OpenAI do not disclose the exact number of parameters for their proprietary models. In contrast, Moonshot AI's Kimi K3 open-weight model is trained on over 2.8 trillion parameters, making it the largest open model to date.

Reports surfaced that Gemini 3.5 Pro was delayed after failing to meet Google's internal standards, particularly in coding and agentic tasks. These areas are currently led by competitors such as Anthropic and OpenAI. Pichai acknowledged that Google needs to improve in AI coding, stating, "There are areas where we've acknowledged we need to improve and coding and agentic coding is an example of that." Coding has become a critical application for AI tools, with companies worldwide adopting solutions like Claude Code and Codex for software development.

Focus on Gemini Flash and Broader AI Ecosystem

During the earnings call, Pichai shifted attention from the Gemini 3.5 Pro delay to highlight Gemini Flash, a lower-cost and faster AI model. Gemini Flash is used in cybersecurity, customer service, data analytics, and enterprise software. The latest version, Gemini 3.6 Flash, improved by over 10 points on a coding benchmark compared to its predecessor, while using fewer tokens. Google also introduced Gemini 3.5 Flash-Lite and a cybersecurity-focused Flash Cyber model, while keeping Gemini 3.5 Pro in partner testing.

Pichai's comments reflected a broader strategy to showcase Google's entire AI ecosystem. This includes cloud infrastructure, custom AI chips, and the integration of Gemini products across Google's services. He stated, "Our AI investments are redefining what's possible across every part of our business," and highlighted "exciting momentum across the board."

Financial Performance and Market Reaction

Gemini now has 950 million monthly active users, up from 750 million in the fourth quarter of 2025. Google Cloud revenue increased 82 percent year-on-year to $24.8 billion, surpassing analyst expectations. The company attributed this growth to enterprise AI solutions and increased adoption of AI infrastructure. Google's cloud backlog reached $514 billion.

Alphabet reported a profit of $112.1 billion, up from $28.1 billion a year earlier. Overall revenue rose 24 percent to $119.8 billion, and Google Services revenue increased 15 percent to $94.5 billion. Despite these gains, Wall Street remains concerned about rising capital expenditures and Google's ability to regain leadership in AI coding and advanced reasoning. Alphabet's annual capital expenditure plans range from $180 billion-$190 billion to $195 billion-$205 billion. Following the earnings report, Alphabet shares fell more than 3 percent in after-hours trading and are down about 9 percent since the end of April.