Reuters Alphabet disappointed Wall Street on Tuesday as holidayseason advertising sales came in below expectations and the company said its spending on items such as servers to power artificial intelligence would jump this year.

Alphabet shares fell 6 in afterhours trade.

Against a backdrop of mixed U.S. economic signals, Alphabet39;s powerhouse units Google and YouTube have faced competition for ad budgets from other online platforms, including Facebook, Instagram, TikTok and Amazon.com.

With retail sales a bright spot, the company39;s fourthquarter ad revenue rose to 65.5 billion from 59.0 billion a year prior. That was short of analysts39; average expectation for 66.1 billion according to LSEG data.

Alphabet39;s disappointing ad revenue numbers suggest that corporations worldwide are still uncertain about the pace of interest rate cuts from global central banks, said Thomas Monteiro, an analyst at Investing.com.

Google, inventor of foundational technology for today39;s AI boom, is also locked in battle with two industry players that have captured the business world39;s attention, ChatGPT39;s creator OpenAI and its backer Microsoft.

While Google Cloud39;s revenue topped Wall Street targets and growth rebounded with a boost from AI, Microsoft39;s Azure grew faster in the same period.

Powering such AI requires heavy investment in servers, data centers and research. Alphabet39;s capital expenditure shot up 45 to 11 billion, the highest in years, and Chief…