GoKawiilSign up to see the future, today Can’t-miss innovations from the bleeding edge of science and tech Email address Sign Up Thank you!
The true cost of AI is rapidly catching up with the tech industry.
At first, tech leaders were adamant that their workforce use up as much AI resources as possible, an approach that’s become known as “tokenmaxxing.”
But as prices for cloud AI tools continue to soar, managers are starting to ask pointed questions about whether all of those expenses are actually worth it. Some are even coming to the realization that it may be cheaper to pay human coders after all.
In perhaps the most high-profile example of this growing concern yet, Uber COO Andrew Macdonald acknowledged during a recent podcast appearance that gains in productivity simply weren’t being reflected in the oodles of cash the company has been shelling out on AI.
“That link is not there yet, right?” he told Rapid Response host Bob Safian. “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 percent more useful consumer features.'”
“If you’re not actually able to draw a direct line to how much useful features and functionality you’re shipping to your users that trade becomes harder to justify because it’s not free,” he complained. “AI is not free.”
While it could “become clearer” over the “coming quarters,” Macdonald said that “I think today it’s hard even if some of the underlying metrics are trending in a really astronomical direction.”
During his appearance, Macdonald referenced comments that Uber’s CTO Praveen Neppalli Naga made to The Information earlier this year, admitting that the ride hailing app’s army of 5,000 engineers had already exhausted the company’s 2026 Anthropic Claude Code token budget for the calendar year by mid-March.
A reminiscent story is playing out at Microsoft. As The Verge reported earlier this month, the company is planning to remove its Claude Code licenses after opening up access to the tool in December to double down on its in-house Copilot tool instead. While officials maintain the move is meant to streamline operations, employees told the publication that the decision was also financially motivated.
... continue reading