Google I/O Floods the Zone

By the Dovetail editors · 4 min read

TL;DR

Google I/O 2026 drops Gemini 3.5 Flash, agentic search, smart glasses and vibe-coded Android apps
Australian drone AI startup Arkeus pulls in $25M at a $100M valuation
Victoria scraps $20M startup fund without awarding a single grant while the federal Industry Growth Program pauses too
CGT reform backlash and funding freezes stack up for AU founders

AI · Google I/O 2026

Gemini 3.5 Flash bets big on agents over chatbots

Google's new flagship model is optimised for agentic workloads, able to autonomously execute multi-step tasks and write software from scratch. It powers a wave of I/O announcements including revamped Search, Gmail Live voice mode and the always-on Gemini Spark assistant.

AI Studio now vibe-codes native Android apps

Google's web-based AI Studio can generate and preview native Android apps from a text prompt in minutes. A new Android CLI also lets third-party coding agents like Claude Code and OpenAI Codex build Android projects from the command line.

SynthID watermarking adopted by OpenAI and Nvidia

Google's AI watermarking standard SynthID is gaining cross-industry traction, with OpenAI and Nvidia among the new adopters. OpenAI is also joining the open C2PA content-provenance standard alongside the integration.

Australian Tech

Drone AI startup Arkeus raises $25M Series A

Defence-focused drone AI company Arkeus hit a $100M valuation with a $25M raise. The funds will stand up a Queensland manufacturing facility and a local team serving Australian Defence customers.

Startup support takes a double hit in Victoria

Victoria has quietly scrapped its $20M Industry Development Fund without awarding a single grant, and the federal Industry Growth Program has been paused. The moves add to uncertainty around CGT reform for founders already questioning the risk-reward calculus.