Uber: Getting Hard to Justify High AI Costs

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Uh, oh. Did someone just poke the bubble?

AI is apparently the 8th wonder of the world. It will bring everyone out of poverty, solve world hunger, eliminate our need to work, and make us all prosperous beyond our wildest beliefs. As crazy as that sounds, that’s what some prominent people in the industry have been hyping.

However, after scaling up usage a bit via free access, AI companies are now trying to cover their costs by increasing deployment of the better, paid versions. Tech companies and large corporations are all gung-ho about using AI, so there’s a lot of early adoption underway, but how useful is that early adoption and is it providing a positive return on investment (ROI)?

Uber is apparently starting to ask these questions, or should be.

In an interview with Uber COO Andrew Macdonald, the host of Rapid Response, former editor-in-chief of Fast Company Bob Safian, mentioned a discussion he’d just had with the co-founder and CEO of Duolingo, Luis von Ahn. Luis had discovered that some of the things AI was supposed to be making more efficient for the company didn’t actually get more efficient. Macdonald, similarly, notes that although you see all these big overarching numbers on how much AI is supposed to be improving efficiency, it can be hard to find proof of that within Uber.

“It’s amazing, and I think it’s this massive transformation of society … but then you sometimes go and you talk to your senior engineering leaders, and you’re saying, ‘okay, how many projects that were on the cutting room floor got moved above the line because of the, you know, productivity gains, because 25% of our code commits were via Claude Code last quarter?’ That link is not there yet.”

Wait, what?

“You’re not … I mean, I think maybe implicitly there’s more that is getting shipped, but it’s it’s very hard to draw a line between one of those stats and ‘okay, now we’re actually producing like 25% more useful consumer features.’ And that line is hard to draw.”

Hmm….

After a little more on where he hopes that will go, he added the following:

“Our CTO, Praveen [Neppalli Naga], went viral because he effectively said in an interview that we had blown through our AI budget, um, for 2026 and it was like, you know, middle of March or something when he said this. [chuckling] And everyone was like, oh, you know, head-exploding moment. We’re going to have to start talking about, you know, token consumption and the associated costs versus headcount, and like making trades on that as an engineering organization. And so if you’re not actually able to draw a direct line to how much, you know, useful features and functionality you’re shipping to your users, that trade becomes harder to justify.”

Hmm, yeah, that sounds a little bit like the reverberations of a bubble. Yes, Macdonald is still very enthusiastic about AI, and Uber is clearly spending a lot of money on it, but those seem to be some clear warning signs that AI is often overhyped and the ROI isn’t there much of the time.