Google trains Gemini 4 to close gap with frontier AI rivals

Key Takeaways

• Alphabet raised 2026 investment forecast to $195-205 billion, citing demand outpacing supply
• Google CEO Sundar Pichai says Gemini 4 requires 'much larger base models' to compete at the frontier
• Gemini app reached 950 million monthly active users, up from 750 million in February

Google CEO Sundar Pichai admitted the company needs bigger base models to compete with frontier AI leaders and confirmed Google has begun training Gemini 4. Speaking on Alphabet's Q2 2026 earnings call, Pichai said the next generation of frontier AI requires 'much larger base models' and that Google's current training run for Gemini 4 is the company's 'most ambitious' yet.

The statement comes as Alphabet raised its 2026 capital expenditure forecast to between $195 billion and $205 billion, up from the previous $180 billion to $190 billion range. The company says demand continues to outpace investment. Google reported Q2 2026 revenue of $119.8 billion, a 24 percent year-over-year increase that beat analyst expectations of $116.9 billion.

Why Google is betting on scale for Gemini 4

Pichai's comments represent a rare public acknowledgment that Google's current models aren't keeping pace with competitors. He pointed to specific weaknesses the company is trying to fix.

“There are areas where we have acknowledged we need to improve. Coding and agentic coding is an example of that, and I think the teams are very, very focused on it.”

— Sundar Pichai, Google CEO

Google is still working on a new frontier model and plans to ship new models monthly. But Gemini 3.5 Pro apparently isn't part of that cadence, even though Google says it's currently being tested. The company is prioritizing scale for Gemini 4 instead.

“We have started our most ambitious pre-training run yet for Gemini 4, and are excited by the progress we are seeing at the frontier.”

— Sundar Pichai, Google CEO

Google Cloud grows 82% as Gemini app hits 950 million users

The earnings report showed strong AI adoption across Google's products. Google Cloud grew 82 percent to $24.8 billion in revenue, while the Services segment rose 15 percent to $94.5 billion. The Gemini app now has 950 million monthly active users, up from 750 million in February.

AI Mode in Google Search crossed one billion monthly active users since its global launch in October. Google claims AI Mode, like AI Overviews before it, is driving more overall search queries. On the advertising side, AI Max has left beta and already has 500,000 advertisers using it.

Cost efficiency vs. frontier capability

The cost per AI response in AI Mode has dropped to its lowest level since launch, even as Google uses more powerful models. The recent Flash 3.6 release demonstrated similar efficiency gains. Over time, that efficiency could give Google an edge on margins for serving AI.

Pichai noted strong demand for Google's lighter-weight models: 'We're seeing tons of demand for our workhorse Gemini Flash series because it hits the sweet spot of performance and cost.'

This raises a strategic question. For daily use cases across Google's ecosystem, efficient mid-tier models may matter more than frontier capability. But for the AGI race and enterprise credibility, Google needs a model that can match OpenAI and Anthropic at the top end.

What the $200B capex increase signals

Alphabet raising its capex forecast by $15 billion to $25 billion mid-year signals confidence in AI demand. The company says it cannot build infrastructure fast enough to meet customer needs. Google Cloud's 82 percent growth suggests enterprise AI adoption is accelerating faster than most forecasts predicted.

The coding gap Google needs to close

Pichai's explicit mention of 'coding and agentic coding' as areas needing improvement is telling. Coding benchmarks have become a proxy for overall model capability, and competitors like Anthropic's Claude and OpenAI's GPT-4 series have pulled ahead on developer-focused tasks. For Google to win enterprise AI contracts, especially in software development, Gemini 4 needs to close that gap.

Frequently Asked Questions

When will Google release Gemini 4?

Google has not announced a release date for Gemini 4. CEO Sundar Pichai confirmed training has begun and called it Google's most ambitious pre-training run yet.

How many users does the Gemini app have?

The Gemini app has 950 million monthly active users as of Q2 2026, up from 750 million in February 2026.

What is Google's 2026 AI investment forecast?

Alphabet raised its 2026 capital expenditure forecast to between $195 billion and $205 billion, up from the previous range of $180 billion to $190 billion.

What areas is Google trying to improve in Gemini?

CEO Sundar Pichai specifically mentioned coding and agentic coding as areas where Google has acknowledged it needs to improve.

Source: The Decoder / Matthias Bastian