Alphabet beat Wall Street estimates for quarterly revenue Wednesday on the back of new AI features and a steady digital advertising market, and said it would boost its capital spending plans for the year to about $85 billion.

Shares of the company, which have risen more than 18% since its previous earnings report in April, were down 1% in extended trading.

Google had earlier pledged about $75 billion in capital spending this year, part of the more than $320 billion that Big Tech is expected to pour into building out AI capabilities.

The companies have defended their aggressive AI spending amid rising competition from Chinese rivals and investor frustration with slower-than-expected payoffs, saying those massive investments are necessary to fuel growth and improve their products.

Alphabet reported total revenue of $96.43 billion for the second quarter ended June, compared with analysts' average estimate of about $94 billion, according to data compiled by LSEG.