Google courts coders and consumers at I/O, touts cheaper AI model for enterprises

MOUNTAIN VIEW, California — Alphabet’s Google on Tuesday put artificial intelligence (AI) agents directly into its search box and rolled out a faster, cheaper version of its Gemini model, aiming to blunt gains by rivals Anthropic and OpenAI among enterprise customers.

Alphabet, which recently came within striking distance of Nvidia as the ‌world’s most valuable company, also reinforced its core consumer products including Search and YouTube by announcing a set of agents that will autonomously complete tasks like making purchases, monitoring ticket availabilities, and planning schedules in real time.

“When people use our AI-powered features in Search, they use Search more,” Alphabet CEO Sundar Pichai said.

The moves, unveiled at Google’s annual I/O developer conference in Mountain View, California, mark its first major showcase since last winter’s update to its Gemini AI model that helped it regain ground in a high-stakes AI race and underline Google’s push to turn its vast consumer reach into an edge in AI.

In their messaging, Mr. Pichai and other Google executives attempted to proclaim the course of AI’s future, after spending past conferences on the back foot from the threat of disruption by AI and the new rivals it had spawned.

“When we look back at this time, I think we will realize that we were standing in the foothills of the singularity,” said Demis Hassabis, chief of Google’s DeepMind AI lab. “It will be a profound moment for humanity.”

Google announced a slew of new tools built using its new Gemini 3.5 model family. The company launched Gemini 3.5 Flash, a model designed for coding and automated tasks, on Tuesday and Mr. Pichai said 3.5 Pro was coming next month.

GOOGLE SLASHES PRICES FOR CORPORATE USERS
Alphabet lowered the cost of its top-tier AI Ultra subscription plan, which gives users access to higher AI usage limits and advanced AI models, to $200 a month from $250. It also announced a $100-a-month version of the Ultra subscription it said was tailored for developers and other work-related users.

As competition shifts to big-spending business customers, Google is stressing lower costs.

“We’ve heard that many companies are already blowing through their annual token budgets, and it’s only May,” Mr. Pichai said, referring to the units of data processed by AI models.

He added that heavy users such as big companies could save more than $1 billion a year by switching to Google’s models, which he told journalists at a briefing before the conference could offer similar performance to other frontier models at up to one-third of the cost.

As AI rivals OpenAI and Anthropic, which are gearing up for IPOs, focus on capturing lucrative enterprise customers, Google swiped back with a new version of coding assistant Antigravity, which competes with Anthropic’s market-leading Claude Code.

Google last year hired ‌key staff from popular AI code generation startup Windsurf to bolster efforts around AI-powered coding.

GOOGLE’S CONSUMER PRODUCTS FUEL AI GROWTH
Tuesday’s announcements reflect a company emboldened by its embrace of AI after quelling market concerns that the technology could upend Google’s competitive edge, either through chatbots like OpenAI’s ChatGPT or upstart AI search alternatives like Perplexity.

Google fought back by leveraging its vast consumer reach into an edge in AI, connecting Gemini to personalized user data across its suite of products that includes Chrome, Gmail and YouTube.

Google on Tuesday introduced Gemini Spark, a new agent that pulls information from various of these apps to draft reports and manage schedules.

Gemini now has 900 million monthly users, according to Mr. Pichai, more than doubling from about 400 million last May. Its AI Overviews feature in Search now has 2.5 billion monthly users, while AI Mode has about 1 billion, he added.

The search engine will also now answer certain queries with AI-generated visuals and code to explain scientific concepts or create tools like a fitness tracker.

“We’re entering the next chapter of Google Search, where incredible AI features aren’t just in search, Google Search is AI search, through and through,” said Liz Reid, a vice-president who leads the search team.

Nick Fox, a senior vice-president in charge of Google’s lucrative Search and Ads unit, said in an interview ahead of I/O that the changes to Search marked the “biggest reinvention of the search box in 25 years.”

Search was Alphabet’s biggest revenue driver in 2025, when it reported $402.8 billion in total revenue. The company is ramping up spending on AI infrastructure, expecting $180 billion to $190 billion of capex this year.

AI VIDEO AND GLASSES
The company also unveiled Gemini Omni, a new video model that Google executives sought to cast as a successor to the Nano Banana image generator, which attracted 13 million first-time users in just four days in September in what has marked one of Google’s few viral AI moments.

Mr. Hassabis said Gemini Omni represented the next step in Google’s vision to create a “world model,” which can simulate the physical nature of the world.

“Starting with video, but over time, Omni will be able to generate any output from any input,” he said.

Google also put a timeline of this autumn for the launch of a revived smart glasses effort it is building in partnership with Samsung and eyewear companies Warby Parker and Gentle Monster. — Reuters