Uber Questions Massive AI Spending as Returns Fail to Match Expectations

The growing excitement around artificial intelligence is beginning to face tougher scrutiny as major technology companies question whether the billions being invested are delivering enough business value. Ride-hailing giant Uber Technologies is among the latest firms to publicly express concern over the rapidly rising costs of AI tools and infrastructure.

Speaking during a Rapid Response interview released on Saturday, Uber Chief Operating Officer Andrew Macdonald acknowledged that the company is struggling to connect its massive AI investments with meaningful business outcomes. His comments come at a time when the broader tech industry is aggressively pushing AI adoption while simultaneously looking for ways to control operational expenses.

The discussion gained attention after Uber CTO Praveen Neppalli Naga previously revealed in an April interview with The Information that the company had already exhausted its Claude Code budget allocated for 2026. Macdonald described the revelation as a “head-exploding moment” internally, triggering serious conversations about escalating AI token consumption and its implications for the company’s workforce and spending priorities.

While Uber has significantly increased its use of AI-powered coding tools, Macdonald indicated that the expected productivity benefits have not yet translated into a comparable rise in consumer-facing innovation.

“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 productivity gains, because 25 per cent of our code commits were via Claude Code last quarter,’ that link is not there yet,” he said.

The statement highlights a growing concern across the technology sector: companies may be generating more AI-assisted code, but measurable improvements in products, services, and customer experiences are still limited.

Macdonald further stressed that the financial trade-off becomes increasingly difficult when companies cannot clearly demonstrate how AI spending is improving the user experience.

“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,” he said.

The executive also pointed out that while AI tools may appear inexpensive or even free to users experimenting with them, businesses are bearing substantial backend costs to support those systems at scale.

Earlier this month, Uber CEO Dara Khosrowshahi confirmed during earnings call that the company was slowing hiring while continuing to invest heavily in artificial intelligence technologies.

Uber’s concerns reflect a broader shift in sentiment across Silicon Valley. Many AI companies and investors have promised that today’s aggressive spending would eventually result in major productivity gains, new revenue opportunities, and reduced long-term costs. However, several firms are now questioning how quickly those benefits will actually materialize.

Uber also revealed that it has been collaborating closely with leading AI model developers to explore commerce integrations within AI chatbots. Despite the hype surrounding AI-driven shopping experiences, the company says widespread disruption has not yet happened.

“We’re working with pretty much all of the large model companies as they roll out commerce, and there hasn’t really been anything that’s taken off yet,” the executive said.

Macdonald added that Uber’s board had earlier feared AI chatbots would dramatically reshape online commerce within a year, but those expectations have yet to become reality.

“It doesn’t mean it won’t happen,” he said, “but that just hasn’t played out yet.”