Uber Questions AI Spending as Productivity Gains Remain Unclear

By: Harsh Vardhan

|

Updated on: 27-May-2026 02:00 PM

6,540 views

Follow Us:

6,540 views

Major technology companies have promoted artificial intelligence as a key driver of productivity and innovation. However, some firms are now questioning whether their significant investments in AI are delivering results fast enough. Uber is among the companies raising concerns about the growing costs of AI and the lack of clear business outcomes.

Key Highlights

• Uber questions the direct business impact of its significant AI spending.
• Company reports 25 percent of code commits used Claude Code last quarter.
• Uber is working with major AI model companies but has not seen major results yet.
• Leadership notes AI costs are rising while productivity gains remain unclear.

Uber Voices Concerns Over AI Costs

Uber's chief operating officer, Andrew Macdonald, recently discussed the company's challenges with AI spending. In a Rapid Response interview released on Saturday, Macdonald referred to comments made by Uber's chief technology officer, Praveen Neppalli Naga. Naga had told The Information in April that Uber had already used up its Claude Code budget for 2026. Macdonald described this as a "head-exploding moment" for the company, leading to internal discussions about increasing AI token consumption and related trade-offs, such as staffing decisions.

Macdonald emphasized that the primary concern is not just the financial cost. He questioned whether Uber's heavy use of AI is resulting in better products or more useful features for users. According to Macdonald, higher AI usage has not led to a proportional increase in consumer-facing improvements. He explained that, despite 25 percent of Uber's code commits coming from Claude Code last quarter, there is no clear evidence that this has accelerated the development of new features.

AI Usage and Business Impact

Uber's leadership has found it difficult to justify the trade-off between AI spending and tangible business benefits. Macdonald stated that if the company cannot directly link AI investments to new features or improved functionality for users, the expense becomes harder to defend. He noted that while AI tools may seem inexpensive or free to users, companies are responsible for substantial underlying costs.

Earlier this month, Uber CEO Dara Khosrowshahi said during an earnings call that the company is slowing hiring as it continues to invest heavily in AI. This reflects a broader trend in the technology sector, where firms are making sacrifices in the hope that AI will eventually deliver significant productivity gains and new business opportunities. However, many companies are still waiting for these benefits to materialize.

Collaboration With AI Model Companies

Uber has been working with several major AI model companies to integrate commerce experiences into AI chatbots. Despite these efforts, the results have not met initial expectations. Macdonald said that none of the new commerce features have gained significant traction so far. He also mentioned that, a year ago, Uber's board was concerned that AI chatbots could dramatically change online commerce. That level of disruption has not yet occurred, although it may still happen in the future.

Industry-Wide Reassessment

The situation at Uber highlights a growing reassessment of AI investments across the tech industry. While companies continue to experiment with AI and explore new applications, many are now scrutinizing the actual value delivered by these tools. The gap between AI spending and measurable business outcomes remains a key issue for decision-makers.