3 ms·

Uber blows through its AI budget in 1 quarter

28 points by ChuckMcM 5mo ago

ChuckMcM 5mo ago
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.
- kotaKat 5mo ago
  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.
  - indigodaddy 5mo ago
    Would humans be cheaper?
    - stavros 5mo ago
      It's not about humans vs LLMs. It's about where the sweet spot of LLM usage by humans is.
- timcobb 5mo ago
  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.
  - ChuckMcM 5mo ago
    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.
    - deleted 5mo ago
      [deleted]
- deleted 5mo ago
  [deleted]
scrlk 5mo ago
> 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.
- deleted 5mo ago
  [deleted]
- ChuckMcM 5mo ago
  Reminds me of the Dilbert, "I'm gonna code me up a minivan!" comment.
- Quarrel 5mo ago
  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.
  - isolay 5mo ago
    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.
LoganDark 5mo ago
> 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.
cbdevidal 5mo ago
Pardon my ignorance but could they not switch to a cheaper model? Honest question.
- annoyingnoob 5mo ago
  Humans?
- stavros 5mo ago
  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".
- PaulHoule 5mo ago
  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!
  - cindyllm 5mo ago
    [dead]
stavros 5mo ago
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.
- imustbelieve 5mo ago
  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...
keithnz 5mo ago
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.
graphememes 5mo ago
> gamify usage > people abuse it > shocked_pickachu.jpg yep, sounds about right
champagnepapi 5mo ago
Related Discussions: - https://news.ycombinator.com/item?id=47976415 https://news.ycombinator.com/item?id=47976415 - https://news.ycombinator.com/item?id=48268871 https://news.ycombinator.com/item?id=48268871
qsxfthnkp2322 5mo ago
Hurry! Fire all your employees like all the others. How else are you going to tokenmax
simonw 5mo ago
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 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.
xvxvx 5mo ago
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.
- clipsy 5mo ago
  > 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.
  - xvxvx 5mo ago
    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.
- dvt 5mo ago
  > 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.
tomhow 5mo ago
Microsoft and Uber Are Running into an AI Cost Problem - https://news.ycombinator.com/item?id=48277753 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 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 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 https://news.ycombinator.com/item?id=47976415 - May 2026 (475 comments)
- ChrisArchitect 5mo ago
  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 https://news.ycombinator.com/item?id=47976415
the_arun 5mo ago
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.
rvz 5mo ago
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-update https://platform.xiaomimimo.com/docs/en-US/news/v2.5-price-u...
ChrisArchitect 5mo ago
Previously: https://news.ycombinator.com/item?id=47976415 https://news.ycombinator.com/item?id=47976415
alextillman 5mo ago
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.

28 points by ChuckMcM 5mo ago

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.

kotaKat 5mo ago
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.
- indigodaddy 5mo ago
  Would humans be cheaper?
  - stavros 5mo ago
    It's not about humans vs LLMs. It's about where the sweet spot of LLM usage by humans is.
timcobb 5mo ago
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.
- ChuckMcM 5mo ago
  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.
  - deleted 5mo ago
    [deleted]
deleted 5mo ago
[deleted]

scrlk 5mo ago

> 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.

deleted 5mo ago
[deleted]
ChuckMcM 5mo ago
Reminds me of the Dilbert, "I'm gonna code me up a minivan!" comment.
Quarrel 5mo ago
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.
- isolay 5mo ago
  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.

LoganDark 5mo ago

> 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.

cbdevidal 5mo ago

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

annoyingnoob 5mo ago
Humans?
stavros 5mo ago
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".
PaulHoule 5mo ago
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!
- cindyllm 5mo ago
  [dead]

stavros 5mo ago

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.

imustbelieve 5mo ago
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...

keithnz 5mo ago

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.

graphememes 5mo ago

> gamify usage > people abuse it > shocked_pickachu.jpg yep, sounds about right

champagnepapi 5mo ago

Related Discussions: - https://news.ycombinator.com/item?id=47976415 https://news.ycombinator.com/item?id=47976415 - https://news.ycombinator.com/item?id=48268871 https://news.ycombinator.com/item?id=48268871

qsxfthnkp2322 5mo ago

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

simonw 5mo ago

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 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.

xvxvx 5mo ago

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.

clipsy 5mo ago
> 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.
- xvxvx 5mo ago
  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.
dvt 5mo ago
> 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.

tomhow 5mo ago

Microsoft and Uber Are Running into an AI Cost Problem - https://news.ycombinator.com/item?id=48277753 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 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 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 https://news.ycombinator.com/item?id=47976415 - May 2026 (475 comments)

ChrisArchitect 5mo ago
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 https://news.ycombinator.com/item?id=47976415

the_arun 5mo ago

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.

rvz 5mo ago

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

ChrisArchitect 5mo ago

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

alextillman 5mo ago

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.