Uber's COO says the company's AI spending is getting harder to justify

Andrew Macdonald, Uber's president and COO, made the comments in an interview with Rapid Response released over the weekend. Drawing on conversations with Uber's senior engineering leaders, Macdonald concluded that greater token consumption was not yielding a corresponding rise in useful features delivered to end users. "That link is not there yet, right? 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,'" Macdonald told the outlet.

The remarks come after Uber CTO Praveen Neppalli Naga disclosed in April that the company had exhausted its entire Claude Code budget for 2026 — just four months into the year, according to Business Insider. Macdonald called the CTO's disclosure a "head-exploding moment," saying it set off company-wide conversations about the cost of token consumption and what the company gives up — including potential headcount — to sustain it.

"We're going to have to start talking about token consumption and the associated cost versus headcount," Macdonald told The Verge. "So 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."

Engineers who are not responsible for paying invoices may treat AI tools as essentially free, Macdonald observed, even though those costs land on the company's balance sheet, according to Business Insider.

Uber disclosed in its first-quarter earnings report that AI coding tools had reached 95% monthly adoption among its engineering workforce, with AI agents authoring more than one in ten lines of code. The company spent $3.4 billion on research and development in 2025, up 9% from the prior year. CEO Dara Khosrowshahi said during the earnings call that Uber was slowing hiring to offset its growing AI investments.

According to Forbes, the share of Uber engineers using Claude Code jumped from roughly a third in February to 84% in March, and per-engineer bills typically ran between $150 and $250 a month, though the heaviest users could generate anywhere from $500 to $2,000. During one hands-on demonstration he ran himself, Neppalli Naga burned through $1,200 worth of tokens in just two hours.

Uber is not alone in reassessing its approach to AI usage. At Duolingo, management reversed course on a policy that had tied employee performance evaluations to AI usage, after staff raised concerns that the metric rewarded tool adoption rather than actual results. "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, according to Business Insider.