Alphabet reports second-quarter earnings after today's close - the first hyperscaler print since cheap Chinese tokens knocked the semiconductor index into a bear market. So naturally, Google chose the eve of that report to ship three new AI models, none of which is the one it promised.
Getty ImagesThe Tuesday launch consisted of Gemini 3.6 Flash, a cheaper workhorse whose headline feature is that it consumes fewer tokens; Gemini 3.5 Flash-Lite, a high-throughput model built for volume; and Gemini 3.5 Flash Cyber, a vulnerability-hunting model that ordinary users are not permitted to touch. Conspicuously absent: Gemini 3.5 Pro, the flagship Google unveiled at I/O in May with a promised June launch, which has now missed multiple targets.
Then there is Gemini 3.5 Flash Cyber, which Google says achieves top-tier performance at finding, verifying, and patching software vulnerabilities inside its CodeMender agent - and which will be available exclusively to governments and vetted partners through a limited-access pilot, on account of what the company calls the technology's dual-use nature. Which is of course aimed at competing with Anthropic's Mythos. Google shipped strengthened Frontier Safety safeguards against CBRN and cyberattack misuse in the same release.
The Flagship That Isn'tAccording to Bloomberg, Pro was held back after falling short of Google's internal targets, particularly on coding, and a late-June attempt to rescue it by refreshing the training data produced disappointing results. The official line is now that Pro is "testing with partners" and will ship when ready - which is to say, there is no date.
The scoreboard is not kind in the meantime. Google currently has no model in the public top ten. Inside roughly a week, xAI shipped Grok 4.5, OpenAI shipped three versions of GPT-5.6, and Moonshot shipped Kimi K3, while Anthropic's Fable 5 sits atop the leaderboards. The verdict from the demand side is the same: AI-native firms canvassed by UBS at its Menlo Park event this month named Anthropic's Opus 4.8 and OpenAI's GPT-5.6 as the models they consider functionally superior. Google did not come up. The delay also affects a major customer - as Apple uses Gemini to power parts of Siri in iOS 27. Oops.
Selling Fewer TokensThe models Google did ship do tell an interesting story... The central pitch for 3.6 Flash is that it reduces output token usage by 17% versus its predecessor on the Artificial Analysis Index - and by as much as 65% on the DeepSWE coding benchmark, where it burns barely a third of what 3.5 Flash did - while taking fewer reasoning steps and tool calls to finish multi-step work. Flash-Lite runs at 350 output tokens per second and is priced at $0.30 per million input tokens and $2.50 per million output.
A year ago the industry's pitch was maximum intelligence at any price, and enterprise buyers obliged by tokenmaxxing their way through nine-figure AI budgets - until they realized the return on this was abysmal.
Breakdown of every $1 spent on AI tokens: less than 20cents reaches real users (44 cents is spent fixing bugs generated by other AI) https://t.co/jFzUVSCPos pic.twitter.com/NwOWg7HppA
— zerohedge (@zerohedge) June 22, 2026The term of art now, per the AI-native firms UBS hosted in Menlo Park this month, is "value-maxxing" - which maybe they should have tried first. Now it's all about model routing, dynamically dropping specific tasks down to cheaper non-frontier models, as table stakes rather than a feature. On top of that, one week after Moonshot's Kimi K3 triggered the chip complex's DeepSeek 2.0 moment - and with UBS math we detailed weeks ago putting Chinese models are producing roughly 95% of frontier capability for 10% of the cost. So - the deflation is now the product. As an aside, Moonshot has been rationing new Kimi K3 subscriptions and API access on capacity constraints while Alibaba teases its next Qwen release: the cheap end of the market is supply-constrained because everyone is hopping on the train.
The bulls have an answer, and in fairness it is not a stupid one - a hedge fund CIO argued in these pages just last week that the cheap-versus-premium debate misses a raw shortage of intelligence with AI barely diffused through the economy. UBS lands in a similar place, arguing the trade is not breaking but maturing into a multi-model, efficiency-obsessed phase in which demand gets reallocated rather than destroyed. Perhaps. But that thesis gets put to the test tonight when Alphabet reports.
Tyler Durden Wed, 07/22/2026 - 13:20Authored by Matt White via TaskandPurpose.com,
The mostly abandoned neighborhoods on Adak Island, Alaska, were once home to 5,000 Navy sailors and their families. But after 40 years as a supply depot, Naval Air Facility Adak closed in 1997, leaving scores of homes and buildings behind. Today, a small community of government workers and Alaska Native families have turned the streets and buildings of the former base into the town of Adak.
The island, far out on the Aleutian Island chain, is so isolated and decayed that Marines occasionally return to simulate hard-to-resupply expeditionary operations or urban chemical warfare among its abandoned buildings. The civilian population, now well below 100, can only reach the island on occasional civilian flights that land on the Navy’s forgotten runway.
But while nearly all of the 300-odd former Navy buildings in Adak are empty and many are collapsing, the U.S. government pays an Anchorage firm $340,000 per year to maintain internet access to them.
An investigation by the Anchorage Daily News and ProPublica published Monday found that an internet provider collects $340,000 every year to keep fairly slow “broadband” internet service active for the town now on the former Navy base.
“After the Navy shipped out, hurricane-force Aleutian winds pried homes apart,” wrote Kyle Hopkins for the Anchorage Daily News. “The worst of it is in a beachfront neighborhood called ‘Officer’s Country’ on old city maps. Bathroom mirrors and toilets and kitchen tables stand exposed to the rain in homes cleaved in half like dollhouses.”
While “raiding” abandoned buildings on the former Navy base in Adak, Alaska, Marines treat a simulated casualty during Arctic Expeditionary Capabilities Exercise in 2019. Marine Corps photo by Lance Cpl. Tia D. Carr.
But even Navy-built buildings now open to the elements with missing walls and roofs, reporters found, were listed on the internet provider’s roster.
The joint investigation was published as part of an ongoing series by Hopkins on internet access in remote Alaska. Adak was Hopkins’ first review of a community built around an abandoned military base.
Hopkins and a photographer flew to Adak, where many buildings on the former Navy base are uninhabitable, with collapsing walls and roofs, from years without repairs in the bitter weather of the Aleutian Islands. Hopkins visited every address on the old Navy base listed as receiving taxpayer-funded internet service.
But Hopkins reported that he found that nearly all residents use Starlink satellite internet. Blanketing the base, he reported not one customer for the tax-funded broadband.
The federal program, Hopkins reported, is paid for by the Universal Service Fund, a multi-billion-dollar effort administered by the Federal Communications Commission and funded as a small fee on nearly all consumer phone bills. The fund is intended to deliver internet to hard-to-reach rural customers.
Though the buildings on Adak were built by the Navy, the service has no current connection to the town or the pricey internet service.
Closed bases meet varying fatesAdak is one of scores of closed military installations that dot the country. Many have found new lives, like Naval Training Center Baldwin Park, Florida, and Lowry Air Force Base in Denver, Colorado, which are today mixed-use developments with thousands of homes, shopping and businesses. When Hurricane Andrew destroyed Homestead Air Force Base in 1992, a section was repurposed as a major racetrack (other parts were recommissioned as a reserve base in 2003).
Abandoned missile silos in the Midwest have been rebuilt as homes and museums — though some remain dangerously abandoned.
Much of the town of Adak is based on jobs created by federal clean-up of the old base, along with other federal agencies that now oversee federal land on the otherwise uninhabited island.
But the town may have a military future. Alaska Sen. Dan Sullivan has led a campaign to move Navy assets to Alaska, which could include reoccupying Adak. Last summer, Navy Adm. Samuel Paparo called for a revival of the base. Forces there, he said, would provide U.S. forces a first line of defense against Russian aggression to “gain time and distance on any force capability that’s looking to penetrate,” Paparo said at a Senate Armed Services Committee hearing.
Though Adak would be a remote assignment, those sent to the cold, windy island would at least know they’d have internet access.
Tyler Durden Wed, 07/22/2026 - 13:05