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.
·
·
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.
Don't want to miss any AI development?
We keep an eye on the AI world for you, and translate what actually matters for your marketing, your tools, and your visibility.
Talk to us
Jan Malte Sander
Founder of BitsAndBucks GmbH. Follows AI developments daily, and uses them in real client projects. LinkedIn