AI recap: Google I/O, new models & billion-dollar rounds
Google makes Gemini 3.5 Flash the default, Alibaba and Cursor answer with new models, and at OpenAI & Anthropic it's all about IPOs and billions. The AI week of May 18–24, 2026 — in brief, with sources.
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6 min read
At I/O, Google moved search fully onto AI — and while the model competition (Alibaba, Cursor) pushes back, OpenAI and Anthropic are lining up the industry's biggest financial deals.
Google I/O 2026: Gemini 3.5 Flash becomes default, AI Mode passes 1 billion users
At I/O, Google made Gemini 3.5 Flash the new default model behind Search's AI Mode — faster than the previous 3.1 Pro and rolled out globally. The numbers behind it are huge: AI Mode passed 1B monthly users, AI Overviews over 2.5B, the Gemini app 900M. Also new: "Personal Intelligence" (opt-in Gmail/Photos connection) plus a preview of Gemini 3.5 Pro and the any-input-to-video model "Gemini Omni." What this means for visibility is in our GEO/AEO guide; where Gemini stands among the tools, in our AI tool comparison.
Source: Google — all I/O 2026 announcementsNew "Google AI Ultra" tier at $100/month
Alongside I/O, Google introduced a new AI Ultra plan at $100/month (with 5× higher Gemini limits than AI Pro); the previous $250 plan was repositioned to $200. For power users, access to Google's strongest models gets notably cheaper — a pattern we're seeing across several providers right now (see the tool comparison).
Source: 9to5Google — I/O 2026Alibaba answers with Qwen 3.7 Max
At its Cloud Summit, Alibaba unveiled Qwen 3.7 Max — an agent-focused reasoning model with a 1M-token context window that claims benchmark wins over Claude Opus 4.6. It's API-only (around $2.50/$7.50 per million tokens) and shows the gap between US and Chinese frontier models keeps shrinking.
Source: TechNodeCursor Composer 2.5: frontier coding at a fraction of the cost
The AI editor Cursor released Composer 2.5 — an agentic coding model that, per Cursor, rivals Claude Opus 4.7 and GPT-5.5 but costs roughly one-tenth per token. Cheaper, capable coding models are exactly the lever that makes automation and custom-software projects more economical.
Source: Cursor BlogGoogle rolls out the May 2026 core update
Google confirmed the May 2026 broad core update — the second core update of the year, with a roughly two-week rollout. As always without specific guidance, but with potentially noticeable ranking shifts. Those who rely on solid content and clean structure tend to ride core updates more calmly.
Source: Search Engine LandBillion-dollar moves: OpenAI IPO and Anthropic round
Two financial heavyweights: multiple outlets reported that OpenAI is preparing confidential IPO paperwork — with a valuation of up to ~$1T discussed. Almost simultaneously, Bloomberg reported that Anthropic is set to close a round of over $30B at a $900B+ valuation. Both are, as of now, reports rather than closed deals — but they show how much capital is flowing into the AI frontier.
Source: Axios (OpenAI) Source: Yahoo Finance (Anthropic)Sources & further reading
- Google: all I/O 2026 announcements
- 9to5Google: Google I/O 2026 (plans)
- TechNode: Qwen 3.7 Max
- Cursor: Composer 2.5
- Search Engine Land: May 2026 Core Update
- Fortune: OpenAI IPO
As of May 24, 2026. IPO/funding reports were not finalized at time of writing. All information without guarantee.
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Jan Malte Sander
Founder of BitsAndBucks GmbH. Follows AI developments daily — and uses them in real client projects. LinkedIn