Alphabet's Gemini reached 900 million monthly users in less than a year, and the company generated $1.2 billion（約1900億円） in AI sales last year, yet some investors sold the stock after reports that Gemini 3.5 Pro—announced in May—is delayed. Despite the setback, Alphabet's ability to distribute Gemini across Search, YouTube, Android, and Google Workspace, combined with major partnerships like Apple's $1 billion（約1600億円） annual deal, underscores substantial progress that a model delay does not erase.
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Alphabet's Gemini user base more than doubled to 900 million monthly users in less than one year, reaching that milestone in May. The company's release of Gemini 3.5 Pro, announced in May, is delayed as the company continues testing and does not believe the model is ready yet. Some investors have sold Alphabet stock in reaction to the delay.
Why it matters
Gemini's integration across Alphabet's existing services—Search, YouTube, Android, and Google Workspace—has turned billions of service users into AI users, a reach that rivals OpenAI and Anthropic lack. Alphabet generated $1.2 billion（約1900億円） in sales from Gemini last year, and Apple is paying Alphabet $1 billion（約1600億円） annually to use Gemini as the underlying model for Siri AI. The scale and monetization already achieved suggest the delay is less material than the selloff implies.
What to watch
Alphabet is designing a processor called Frozen v2 that could deliver six to 10 times more AI tokens per unit of power compared to the company's current Tensor Processing Unit (TPU) processors; the chip is not expected to launch until 2028. Alphabet stock trades at a trailing price-to-earnings ratio of 26, compared to the tech sector average of 40.
Alphabet's Gemini user base reached 900 million monthly users in May, more than doubling in less than a year, yet some investors initiated a selloff of Alphabet stock after reports surfaced that the company's Gemini 3.5 Pro model—announced back in May—is delayed. The company is reportedly still testing Gemini 3.5 Pro and does not believe it is ready for release.
The user growth reflects Alphabet's advantage in distribution across its existing services. Billions of people use Alphabet's Search function, AI Mode searches, YouTube, Android mobile operating system, and Google Workspace, all of which now implement Gemini in some form. By contrast, OpenAI and Anthropic lack comparable integration across multiple consumer-facing platforms, giving Alphabet the ability to convert users of its broader software and services portfolio into Gemini users. The company is packaging Gemini as part of its broader software subscriptions, positioning the AI model as a long-term competitive advantage.
Alphabet has already begun monetizing this user base. The company generated $1.2 billion（約1900億円） in sales from Gemini last year. Apple is using Gemini as the underlying AI model for the new Siri AI, making a chief competitor one of Alphabet's biggest Gemini customers; Apple will reportedly pay Alphabet $1 billion（約1600億円） annually for this arrangement. Beyond near-term model releases, Alphabet is investing in AI hardware to maintain efficiency gains. According to reporting from The Information, Alphabet is designing a processor called Frozen v2 that incorporates some of its Gemini architecture directly onto the chip, providing six to 10 times more AI tokens used per unit of power than Alphabet's current Tensor Processing Unit (TPU) processors. The chip is not expected to launch until 2028. Alphabet stock currently trades at a trailing price-to-earnings ratio of 26, compared to the tech sector average of 40.
Alphabet's delay of Gemini 3.5 Pro triggered a selloff among some shareholders, but the underlying user and revenue metrics suggest the company has already built substantial momentum in AI. The 900 million monthly Gemini users represent a more-than-doubling in less than a year, a gain driven by Gemini's embedding across Alphabet's existing software ecosystem—Search, YouTube, Android, and Google Workspace. Unlike OpenAI and Anthropic, which rely primarily on standalone products, Alphabet has leveraged its distribution advantage to convert service users into AI users at scale.
Monetization is also underway: last year's $1.2 billion（約1900億円） in Gemini sales and Apple's $1 billion（約1600億円） annual deal to power Siri demonstrate that the company is successfully converting AI users into revenue-generating relationships. The reported development of the Frozen v2 processor—set to deliver six to 10 times more AI tokens per unit of power than current Tensor Processing Units—further signals that Alphabet is investing in vertical hardware-software integration to maintain competitive advantage over time, even if near-term model releases slip.
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