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.

Amazon will seek to reassure investors on Thursday that its cloud business, a critical driver of profits, is growing at a fast enough clip to offset any pullback in consumer spending that could throttle its retail operations.

Amazon is scheduled to report second-quarter results after the closing bell Thursday, with traders expecting the stock could reach record highs by the end of the week.