AI & Machine Learning
Business Insider7 days ago
0

Uber's COO says it's getting harder to justify the money spent on AI tokenmaxxing

AI

Uber's COO Andrew Macdonald says it's becoming harder to justify AI costs as higher token usage doesn't yield proportional productivity gains or useful features.

Uber's COO says it's getting harder to justify the money spent on AI tokenmaxxing
Intelligence Insights

The Big Picture

In a Rapid Response interview, Uber COO Andrew Macdonald stated that justifying AI investments is increasingly difficult because the company isn't seeing proportional returns. He noted that Uber CTO Praveen Neppalli Naga revealed in April that the company had already exhausted its Claude Code budget for 2026, sparking internal debates about AI token consumption and trade-offs like head count. Macdonald explained that after discussions with senior engineering leaders, he found no clear link between higher token usage and increased useful consumer features. This comes as Uber CEO Dara Khosrowshahi mentioned slowing hiring to offset AI costs. Macdonald contrasted this with Big Tech's 'tokenmaxxing' trend, warning that AI can seem free to users but companies ultimately bear the cost. He cited Duolingo's reversal of including AI usage in performance reviews as an example of companies questioning AI's value.

Why It Matters

Uber's COO publicly questioning AI's ROI signals a growing corporate pushback against indiscriminate AI spending. As companies like Duolingo also retreat from AI-for-AI's-sake metrics, the tech industry may shift from tokenmaxxing to demanding measurable productivity gains, potentially cooling the AI investment frenzy.

Deepen your understanding

Use our AI to break down complex signals.

Select an AI action to generate more depth.

Andrew Macdonald, Uber COO, on Centre Stage during day one of Collision 2022 at Enercare Centre in Toronto, Canada.
Andrew Macdonald, Uber COO, on Centre Stage during day one of Collision 2022 at Enercare Centre in Toronto, Canada.
Andrew Macdonald said it's getting harder to justify money spent on AI.

Sam Barnes/Sportsfile for Collision via Getty Images

  • Uber's COO said it's getting harder to justify the trade-offs of AI investments in the company.
  • He said he's not seeing proportional productivity gains from increasing AI costs.
  • Uber's CTO said in April that the company had burned through its Claude Code budget for the whole of 2026.

A top Uber exec said AI is not giving the company bang for its buck.

In a Rapid Response interview released on Saturday, Uber's operations chief, Andrew Macdonald, said it was becoming harder to justify AI costs within the company.

He said that Uber CTO Praveen Neppalli Naga went viral after telling The Information in an April interview that Uber had already blown through its Claude Code budget for 2026.

The comment led to what he described as a "head-exploding moment," sparking discussions about AI token consumption within the company and the trade-offs it creates, such as on head count.

He said that, based on talks with Uber's senior engineering leaders, he realized higher token usage did not translate into a proportional increase in useful consumer features.

"That link is not there yet, right?" he said. "I think maybe implicitly there is more that is getting shipped, but it's very hard to draw a line between one of those stats and, 'Okay, now we're actually producing 25% more useful consumer features.'"

He said that the trade-off costs from AI are harder to justify because he can't draw a direct link. Earlier this month, CEO Dara Khosrowshahi said in an earnings call that Uber was slowing hiring to counter its investments in AI.

Macdonald added that AI can seem free if you're "just a user sitting there coming up with interesting use cases" without paying for it. But ultimately, the company foots the bill.

While Big Tech is going hard on tokenmaxxing —using AI as much as possible — and evaluating employees by their AI usage, some companies are starting to go the other way.

Duolingo, for instance, walked back its decision to include AI usage in performance reviews after employees asked whether they had to use AI for the sake of using it.

"It felt like, rather than being held accountable for the actual outcome, we were trying to just push something that in some cases did not fit," Duolingo CEO Luis von Ahn said in a podcast interview in April.

Read the original article on Business Insider
Startups Big Tech AI

Intelligence Exchange

0

Log in to participate in the exchange.

Sign In

Syncing Discussions...

Finding Related Intelligence...
Uber's COO says it's getting harder to justify the money spent on AI tokenmaxxing | TechCulture