An increase in Amazon Web Services spending cut into the cloud giant’s profits in the second quarter as AWS raced to meet demand for AI against Microsoft, Google, and others.

Amazon.com Inc. projected operating income in the current quarter that fell short of analysts’ estimates, worrying investors that the tech giant is spending too much to keep up with competitors in the race for artificial intelligence.

The tech giant expects total net sales to be between $174.0 billion and $179.5 billion in the third quarter, compared with analysts’ average estimate of $173.08 billion.