Alphabet’s New Model & Novo’s Lawsuit

**Travis Hoium** (0:02)
The Heart of Earning Season starts today. Motley Fool Hidden Gems Investing starts now.
Welcome to Motley Fool Hidden Gems Investing. I'm Travis Hoium, joined today by Lou Whiteman and our special guest, Jon Quast. Guys, earning season really, I think today is kind of the day that marks the beginning. We've got Tesla, we've got Alphabet. Both of those stocks are either going to beat or miss their estimates, and their stocks are gonna be up and down. That's not what we're gonna talk about today. We're gonna start with the news from Alphabet, and that is Gemini. Lou, they released a new model yesterday, Gemini 3.6 Flash, did not get a lot of positive reviews from the AI pundit class. What was your take on this?
Was this a little bit too harsh, or what is going on with Gemini at this point?

**Lou Whiteman** (0:51)
First of all, throwing shade on Jamie Dimon and the big bank earnings, so there you go. But all right.

**Travis Hoium** (0:57)
Yeah, well, I mean, big banks, not nearly as exciting as what's going on in tech right now.

**Lou Whiteman** (1:03)
Is it? I don't know.
But yeah, so it kind of, as you say, fell on deaf ears in part because the new super duper model, which I think that's what they're calling it, right? Gemini super duper. The frontier model is delayed. But here's the thing, and I think we need to step into normie town here, because for all of the talk about the frontier models and these cutting edge models, very few people know what's going on there and care. It's not the percentage that you would think if you scroll on Twitter. About half the global population is using AI, but the number of people using these frontier models by some estimates, less than 10 percent. So yes, the people who do care are the ones driving spending, so it does matter some if this Google model isn't the latest and greatest that people wanted. But increasingly, it feels like most of the revenue, most of the work is not going to go to and come from the frontier models. They're just too dang expensive. It's going to come from the most affordable, rational way to do the job. I think there's some cool things here. Alphabet's cyber tool seems very useful. It hunts and patches for vulnerabilities. I don't think that this is a big deal in and of itself. I think Alphabet's job is to just put out a model people are going to use. It seems like that's going on and the rest of it is just a fun geek off, but it's a geek off.
Yeah.

**Travis Hoium** (2:32)
Jon, is that what you see here? Is this a battle of the geeks and the normies?

**Jon Quast** (2:37)
No, I don't know about that. See, I think what's really happening here, I don't think that users are necessarily dissatisfied with Gemini 3.6 Flash. I think they are miffed that they don't have Gemini 3.5 Pro yet. And I really think what Alphabet is in danger of doing here is angering its high spend users. And that's not really a good thing because there are users who pay for Pro, who were expecting Pro to be released in June, because that's what the company said, we're going to release Gemini 3.5 Pro in June.
And they were expecting that yesterday, and instead what they got was 3.6 Flash first. And there are some things that this Flash version can actually do better than the top Pro model right now. That's actually kind of a problem.

**Travis Hoium** (3:24)
Yeah, it is interesting that they, as some of these other labs, OpenAI and Anthropic in particular, are leaping ahead on the very, very bleeding edge. Lou, I want to end with this.
Is this a case of some of these companies just maturing into what they're going to be long term? Because we've talked a lot about artificial intelligence spend and all this kind of stuff. But as the business models are starting to form into shape, it seems like Anthropic is winning this coding class, the agents, the people who are willing to put all this stuff together and do whatever it is they're doing with Fable. But then you got the regular people who are just using search and are going, oh man, these AI overview tools are pretty cool. They answer all my questions and that's Flash 3.6 sitting underneath. So is this sort of Gemini and Google saying, hey, you know what, this is where our money is. Being a little bit faster, a little bit cheaper is going to be great for the bottom line.