Uber blows through its AI budget in 1 quarter | Hacker News Reader

Uber blows through its AI budget in 1 quarter

fortune.com

28 pointsChuckMcM34 comments

Microsoft and Uber Are Running into an AI Cost Problem - https://news.ycombinator.com/item?id=48277753 - May 2026 (6 comments)

Uber president says AI spending is getting 'harder to justify' - https://news.ycombinator.com/item?id=48277485 - May 2026 (132 comments)

Uber’s COO says it’s getting harder to justify money spent on tokenmaxxing - https://news.ycombinator.com/item?id=48268871 - May 2026 (334 comments)

Uber torches 2026 AI budget on Claude Code in four months - https://news.ycombinator.com/item?id=47976415 - May 2026 (475 comments)

More notably the previous discussion on this topic:

Uber torches 2026 AI budget on Claude Code in four months

https://news.ycombinator.com/item?id=47976415

Ruh-Roh. Chuckling aside, this is a really good thing. This is, btw, EXACTLY how enterprises figured out they weren't ready for "The Internet" in the dot com boom. They were spending millions on servers and kit and the ROI was crap.

The computer told them they ran out of tokens. The executives thought they could just put a quarter in the slot. The computer instead laughed and told them to put the whole financial quarter in it.

Would humans be cheaper?

It's not about humans vs LLMs. It's about where the sweet spot of LLM usage by humans is.

This is going to be very different though. These companies will just start investing in in house cheaper inference that's been on the front page here the last few weeks.

Oh absolutely. When asked by executives how I think they should adopt AI I've always been upfront about its strengths and weaknesses, and unlike a lot of technologies you can try out a lot of different things on much cheaper technology. As long as they throw out the notion that "more expensive" AI is "better" AI, it gives them a good way to compare workflows with and without machine learning augmentation.

> after incentivizing employees to adopt the technology through an internal leaderboard ranking teams by total AI tool usage.

When you pay by the dead cobra, don't be surprised when people start breeding cobras.

Reminds me of the Dilbert, "I'm gonna code me up a minivan!" comment.

It's just such an old old business school idea. Metrics matter.

The classic example is the Second Fleet of convicts that were sent to Australia - they were paid per convict that boarded the ships. 40% of them died. Unsurprisingly perhaps, slave traders won that contract.

They started paying per live convict landed in Australia after that.

A COO at a ~$150B firm like Uber certainly should know what the outcome will be before the leaderboard goes up. Really makes you wonder if the board was incentivising him to increase AI usage; job done, bonus unlocked.

Or maybe it’s just what it looks like: A good old boys network of incompetent inbreds whose only qualification is that their parents could buy them memberships in the right clubs.

C-level FOMO strikes again.

Let’s be blunt: any CEO or executive that fell for this AI wealth extraction needs to be fired ASAP. These are not the type of people who you want running a company.

My own company hired a new CEO in Q1 and in his first company address he declared that anyone not using AI for their daily duties was putting themselves out of a job and would be unemployable by anyone else. I laughed at that nonsense. 5 months later and we’ve seen zero growth or improvements due to AI. This chucklehead CEO will be the unemployable one.

> This chucklehead CEO will be the unemployable one.

The chucklehead CEO will get a severance package worth more than you've made in your life and walk into another C-suite position courtesy of his golfing buddies.

Your version is a lovely thing to daydream about, though.

My prediction: AI will cause so much damage to those who adopted it, it will become a slur. Anyone involved in it, or who embraced it to the detriment of their business, will be shunned. It will be the sign of poor judgement.

> These are not the type of people who you want running a company.

This is quite literally the opposite of reality, and it's funny to see internet experts that haven't so much as raised 100k always criticize seasoned C-level execs. Not that C-levels are geniuses or something (in fact a lot of times they're idiots), but there's a very good reason people are flocking to AI. The downside is relatively minor: a few million wasted, whatever; while the upside could be generational: being on the forefromt of an internet-level technology.

It's easy to make fun of bad ideas in retrospect (the Metaverse, VR, blockchain, etc.) but what people forget is that good ideas are often indistinguishable from bad ideas. So you should (as a tech company; not as a bank or as a hospital) generally prefer a CEO that's willing to swing for the fences rather than someone timid and overly conservative.

Calling it a few million is laughable.

Regarding the Metaverse, VR, blockchain, etc. people were antagonistic towards them at the time, not in retrospect. If anything, people are showing much more hatred towards AI than any of these aforementioned technologies.

The downside is far from minor: seasoned employees are being let go, taking with them the very knowledge and skillsets that built these companies, likely never to return. All for a gamble on new tech that has yet to produce anything resembling worthwhile.

As far as I can tell this entire story was derived from a 2 minute segment in this YouTube video: https://www.youtube.com/watch?v=y_mQ6xLcKyc&t=1616s - I linked directly to the relevant section at 26:56 in the video.

If you watch the video snippet it seems a whole lot less of a big deal than all of the headlines that have come out of it.

Feeling nostalgic. There is a new tech. In the beginning everyone will be asked to go crazy on spending as much as you can & just focus on the outcome. After a while, they will see just cost is going up (less on outcomes). Now, start throttling the dollar limits per employee. By this time whole industry will settle on this new tech & reality. Everyone will learn it is not all that fancy as it sounded earlier.

My ongoing theory is for small to middle sized businesses AI is incredibly useful as it will help leverage you to grow your business by building more than you could before AI. But for big businesses, like uber, not sure the advantages are the same, they could already build what they want, so it seems the only thing that's likely is cost savings.

> gamify usage > people abuse it > shocked_pickachu.jpg

yep, sounds about right

Related Discussions:

- https://news.ycombinator.com/item?id=47976415

- https://news.ycombinator.com/item?id=48268871

Hurry! Fire all your employees like all the others. How else are you going to tokenmax

> through an internal leaderboard ranking teams by total AI tool usage

So you were encouraging people (in fact, practically threatening people) to waste as many tokens as possible. No wonder you blew through the budget so quickly.

The AI economic bubble is not because AI is useless. There was a paper recently that highlighted how AI is diagnosing pancreatic cancer patients years before humans do. This is not a one off (and not limited to science). Those who are getting these types of results across many domains understand the potential value (like the people who get a two year head start on their treatments).

The problem is that the entire market right now is set up for resolving things with hardware instead of software. Bigger models, faster chips, data center sprawl etc. Clearly that is not sustainable. But if you use AI inference for reasoning only, and traditional software like databases, web searches, etc. for the things they do well (at a fraction of the cost) the economics flip.

Trying to force expensive training updates and ever larger models that know who the first baseman was for the winning 1939 world series time is useless and where the cost-to-value ratio is broken. Pull what you need from a search api, and send the results to an LLM to analyze. No fine tuning, no super big chips and even small models can produce good results.

Previously: https://news.ycombinator.com/item?id=47976415

Pardon my ignorance but could they not switch to a cheaper model? Honest question.

Humans?

They just told developers to use AI as much as they can, so I'm sure there was quite a bit of frivolous usage (they had leaderboards). This isn't "how much more productivity can we get with AI", it's more "let's spend as much as humanly possible and see what happens".

They might still struggle to get enough value out of it. An individual who is looking at it from the viewpoint of "can I get my money's worth of value out of it?" might succeed if they are thinking about value in and value out. If their thinking is FOMO motivated and there is the slightest whiff of "we have to do it because everybody else says they are doing" they won't get a penny of value out of it... but they don't need to!

Doesn't this just mean that their incentives worked too well? If I budget $1M, for the year, tell everyone to use AI as much as they can, and they spend that million in four months, so what? Next time I just tell them to spend it slower.

That's why the headline is paired with the release that this company also got a years worth of productivity out of their first quarter. Erm, I mean 10x 1 year's worth of productivity... or was it 100x 1 year's of productivity...

But we need to keep prompting at the Anthropic casino! There is a token slot machine called "Jevons paradox" that promises as the cost of your tokens get much cheaper, you be more productive in gambling even more tokens! /s

Except what Uber is experiencing is that the tokens are not getting cheaper and the employees are gambling even more tokens and using up the budget; racking up expensive bills for Uber. So they are blowing through their budget.

It is at least cheaper to gamble your tokens with DeepSeek's or Xiaomi's casinos and they have just announced a permanent 99% off deal with an allocation of 100 trillion tokens! [0]

That is a great deal, with a small catch. (If you are fine with sending your data and prompts to them)

[0] https://platform.xiaomimimo.com/docs/en-US/news/v2.5-price-u...

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