Though Google Cloud is dominating headlines for its surprising outperformance, Alphabet’s core ad business remains robust. Google Search brought in revenue of $54.19 billion for the quarter, growing 12% year over year, while YouTube Ads revenue jumped 13% to $9.8.

Alphabet Inc. said demand for artificial intelligence products boosted quarterly sales, and now requires an extreme increase in capital spending — heightening pressure on the company to justify the cost of keeping up in the AI race.

Shares of Alphabet (GOOGL) climbed Thursday, a day after the Google parent posted better-than-expected earnings and said it would boost its capital spending this year by $10 billion. The company's Class A shares,