Uber's AI push hits a wall — CTO says planned budget already blown despite $3.4B R&D tab

Uber is running headfirst into the expensive side of the AI craze. It has been reported that Chief Technology Officer Praveen Neppalli Naga told staff the company is “back to the drawing board” after internal AI use outpaced expectations and exhausted the planned AI budget just months into 2026. The company spent $3.4 billion on research and development in 2025 — a 9% increase — and those numbers look set to climb.

AI usage surge, costs follow

Engineers were actively encouraged to adopt tools like Anthropic’s Claude Code and Cursor — even ranked on internal leaderboards, it has been reported that — which drove rapid uptake. Claude Code in particular allegedly became the dominant tool since late last year, while Cursor plateaued. Adoption was fast. So were the bills. The takeaway: AI can be a productivity boost — and a runaway cost center.

The road ahead

Around 11% of Uber’s live backend code updates are now written by AI agents, and Naga envisions a future of “agent engineers” that can code, test and deploy with other AI layers supervising. Uber is also reportedly preparing to trial OpenAI’s Codex as it expands its stack. Hiring hasn’t slowed, but the tension is clear: how long before people take a back seat to machines — and at what price?

This is more than a one-company hiccup. If a giant like Uber finds AI adoption blasting through budgets, others in the industry will pay attention. The AI gold rush still has a few expensive lessons to teach — sometimes innovation costs more than you expect, and sometimes money talks louder than code walks.

Sources: yahoo.com, Hacker News