Google expands AI push at I/O with enterprise-focused Gemini upgrades and smarter search tools

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Alphabet Inc.’s Google (NASDAQ:GOOG) on Tuesday introduced a range of new artificial intelligence tools at its annual I/O developer conference, including AI agents integrated directly into Search and a faster, lower-cost Gemini model aimed at enterprise custo…

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Fiona Craig

NASDAQ:GOOG Latest News May 20 2026 6:35AM

The announcements come as Google intensifies competition with rivals including Anthropic and OpenAI in the race to attract high-value corporate AI users.

Google also showcased new AI agents designed to autonomously carry out tasks such as purchasing products, monitoring ticket availability and organising schedules in real time across its ecosystem of consumer services.

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

Google positions Gemini at the centre of its AI strategy

The I/O conference in Mountain View, California marked Google’s first major AI showcase since the release of the updated Gemini model last winter, which helped the company regain momentum in the intensifying AI race.

Executives used the event to present Google’s long-term vision for artificial intelligence after previous conferences had focused heavily on the disruptive threat posed by emerging AI competitors.

“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, head of Google DeepMind. “It will be a profound moment for humanity.”

Google unveiled multiple tools powered by its Gemini 3.5 model family, including Gemini 3.5 Flash, a model designed specifically for coding and automated workflows. Pichai also confirmed that Gemini 3.5 Pro is scheduled for release next month.

Google cuts AI pricing for enterprise customers

Google also reduced pricing for its premium AI Ultra subscription plan, lowering the monthly cost from $250 to $200. The package provides access to higher usage limits and advanced AI models.

The company additionally introduced a $100-per-month version targeted at developers and professional users.

As competition increasingly centres on enterprise AI spending, Google is emphasising cost efficiency as a key differentiator.

“We’ve heard that many companies are already blowing through their annual token budgets, and it’s only May,” Pichai said.

Pichai added that large corporate customers could potentially save more than $1 billion annually by switching to Google’s AI models, which he said could deliver comparable performance to rival frontier models at roughly one-third of the cost.

Google also introduced a new version of its coding assistant Antigravity, positioning it against Anthropic’s Claude Code platform. The company strengthened its AI coding ambitions further last year by hiring senior staff from AI coding startup Windsurf.

AI integration across Search, Gmail and YouTube accelerates

Tuesday’s announcements highlighted Google’s growing confidence in its AI strategy after addressing concerns that chatbots such as ChatGPT and AI search startups like Perplexity AI could weaken its dominance in online search.

Google has instead focused on leveraging its large consumer ecosystem by integrating Gemini across products including Chrome, Gmail and YouTube using personalised user data.

The company introduced Gemini Spark, a new AI agent capable of pulling information from multiple Google applications to generate reports and manage schedules.

According to Pichai, Gemini now has 900 million monthly users, up from around 400 million a year ago. He also said AI Overviews in Search now serve 2.5 billion monthly users, while AI Mode has approximately 1 billion users.

Google also announced that Search will increasingly answer certain queries using AI-generated visuals and code capable of explaining scientific topics or creating tools such as fitness trackers.

“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, vice president of Google Search.

Nick Fox, senior vice president overseeing Google’s Search and advertising operations, described the latest updates as the “biggest reinvention of the search box in 25 years.”

Search remained Alphabet’s largest business in 2025, helping generate total annual revenue of $402.8 billion. The company expects capital expenditure on AI infrastructure to reach between $180 billion and $190 billion this year.

Google unveils AI video tools and revives smart glasses plans

Google also introduced Gemini Omni, a new AI video-generation model that executives described as the successor to the Nano Banana image generator, which attracted 13 million first-time users within four days last September.

Hassabis said Gemini Omni represented another step toward Google’s goal of creating a “world model” capable of simulating physical environments.

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

The company additionally confirmed plans to relaunch its smart glasses initiative this autumn through partnerships with Samsung Electronics Co., Ltd., Warby Parker Inc. and Gentle Monster.

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