After several years of criticism that it was lagging in artificial intelligence, Google is turning up its competition with smaller startups such as OpenAI and Anthropic.
On Tuesday, Google released a new AI model, Gemini 3, that improves on its predecessor’s ability to create software programs, organize email, and help businesses analyze documents. It can also mix graphics and text together when responding to requests involving travel itineraries, history or art.
Google said the model, one of a handful of big AI projects competing for industry leadership, would be available in its Gemini app and could be used to fulfill Google Search queries in AI Mode, a conversational search feature it introduced this year.
The impending release of Google’s newest model stoked anxiety inside the companies that jump-started the AI arms race. At OpenAI and Anthropic, two of Google’s closest AI rivals, workers have speculated that it could be bad for their businesses if Google’s models outperform theirs in tasks such as autonomous coding or image generation, two people with knowledge of the discussions said.
“We’re in a situation where — because of Google’s size and space and their first-mover advantage in search — Gemini could take market share and cause OpenAI and others to fall behind,” said Mike O’Rourke, the chief market strategist at JonesTrading, an institutional trading firm. He said such a turn toward Gemini could ripple through the market, raising questions for companies such as Oracle and Microsoft, which OpenAI has committed to pay billions of dollars for computing.
The AI boom is also facing questions about whether the soaring costs of the technology can be justified by the business opportunities it is creating. AI systems today are primarily used to fulfill traditional internet search queries and help software engineers automate computer programming.
But the technology runs in massive data centers filled with expensive supercomputers, which the industry is expected to spend nearly $7 trillion to build by 2030, according to McKinsey & Co. Across Wall Street, investors have grown skeptical that companies such as Anthropic, OpenAI, Microsoft and Google can generate sufficient sales to cover their spending.
“We need to get to a point where we see very capable, high-quality use cases to see the revenue start to flow,” said Ben Bajarin, principal analyst at Creative Strategies, a technology analysis firm. “We’re not there yet.”
(The New York Times has sued OpenAI and Microsoft, accusing them of copyright infringement of news content related to AI systems. OpenAI and Microsoft have denied those claims.)
In a press briefing, Google said the information produced by Gemini 3 was 72% accurate, according to a standard benchmark test. That is notably high for an AI model of this kind, but it may not be what the average user expects from a technology that will help drive the Google search engine. Gemini also scores better than other leading models on several standard benchmarks, according to the company.
Koray Kavukcuoglu, the chief technology officer of Google’s AI division, indicated that when the company deployed Gemini on its search engine, its accuracy would improve. When paired with a search engine, the new model can instantly retrieve information from the internet and work to verify particular facts — though this, too, works only so well.
“If people are looking at Google to save them from blue links and having to do the work themselves, this is still far from good enough,” said Manos Koukoumidis, a co-founder of Oumi, a startup that helps businesses automate, customize, and deploy AI technologies.
Google has made strides in Gemini’s distribution, as well. The app has 650 million monthly active users, the company said, up from 350 million in March. By comparison, OpenAI says it has about 700 million weekly users.
To add more users, the company will make its Google AI Pro subscription service free to U.S. college students, which will save them about $240 a year. It is the second time that Google has made that offer this year.
Two dozen companies have begun using Gemini 3 to analyze their data and accurately transcribe multilingual business meetings, Google said. The app can also do things like organize people’s inboxes and draft replies for emails.
Bajarin said those abilities could help Google as it competed with Microsoft and Amazon for cloud computing customers. Last month, the company reported that quarterly sales for its cloud business had risen by a third to $15 billion, largely driven by demand for AI.
This article originally appeared in The New York Times.
