Gemini 3.5 Flash and a Cloud Empire: Alphabet Balances AI Pricing Power With Insider Allegations

Alphabet made a bold pricing statement on May 28 that rippled through the AI sector. The same day it sealed a strategic partnership with private-equity giant EQT, Google Cloud launched Gemini 3.5 Flash — a model the company claims delivers frontier-level intelligence at a fraction of competitors’ costs. At $1.50 per million input tokens and $9.00 per million output tokens, the offering undercuts GPT-5.5 and Claude Opus 4.7 by roughly 70% and 45%, respectively. The price-to-performance ratio, executives argue, resets the market benchmark. Shopify has already deployed 3.5 Flash for parallel data analysis, while Macquarie Bank is piloting it for customer onboarding, processing documents exceeding 100 pages. Google’s CEO estimated that a large enterprise processing around one trillion tokens daily and shifting 80% of workloads to Flash models could save more than $1 billion annually.

The EQT deal itself is equally ambitious. More than 300 portfolio companies will gain access to Google’s Gemini Enterprise Agent Platform, selected Gemini models, and cybersecurity tools from Mandiant and Wiz, alongside sovereign cloud offerings for compliance-heavy sectors. Beyond cloud consumption, software firms within EQT’s stable can distribute their products through Google’s online store, and Google engineers will embed directly with EQT’s AI team. Consulting support from Accenture, Deloitte, and KPMG is also part of the package — a sign that the alliance is built for scale, not pilot testing.

Moments like these are underpinned by a blockbuster first quarter. Alphabet posted revenue of $109.9 billion, a 21.8% year-over-year climb that smashed analyst expectations. Earnings per share came in at $5.11, more than double the consensus estimate of $2.64. Google Cloud remained the star, with revenue surging 63% to $20 billion and a margin of 32.9%. The backlog of cloud contracts now stands at $462 billion, reflecting sustained demand for infrastructure and AI workloads. To keep up, Alphabet plans capital expenditure between $180 billion and $190 billion for the full year — roughly six times what it spent in 2022. In a strategic twist, CEO Sundar Pichai confirmed that Alphabet is now selling its custom Tensor Processing Units directly to select customers for deployment in their own data centers, opening a new revenue line beyond cloud rental.

Should investors sell immediately? Or is it worth buying Alphabet?

Yet the story is not without shadows. A EU antitrust probe under the Digital Markets Act could result in a record fine — a regulatory overhang that remains unresolved. More immediately, the company faces a reputational blow from an insider trading case. US authorities have filed a criminal complaint against Michele Spagnuolo, a 36-year-old Google engineer, alleging he used confidential internal data from “Year in Search” 2025 to place bets on the prediction platform Polymarket. The US Commodity Futures Trading Commission has also brought a civil suit. Spagnuolo, who has been placed on leave, is accused of making more than $1.2 million in profits and faces charges of commodity fraud, wire fraud, and money laundering.

For now, investors appear to be weighing the operational momentum more heavily than the legal noise. Alphabet shares closed at €326.10, sitting just 5.37% below the 52-week high of €344.60. The stock has advanced 21.18% year to date and a stunning 116.48% over the past twelve months. Technical indicators remain steady: the RSI stands at 62.4, with shares trading 9.35% above the 50-day moving average and 26.12% above the 200-day line. Analysts see further upside, with a consensus price target of $412.94. The key question in the months ahead is whether cloud growth and the AI pricing offensive can keep overshadowing the legal and regulatory headwinds.

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