Source : INDIA TODAY NEWS
Artificial intelligence came, it improved workflows, and now it is slapping companies with big bills that some are struggling to manage. After Microsoft reportedly moved to limit access to certain AI coding tools internally, Uber has now started restricting employee use of popular AI coding platforms such as Claude Code and Cursor after reportedly exhausting its annual AI budget within the first four months of 2026.
advertisement
According to a Bloomberg report, Uber has introduced a monthly spending cap of $1,500 per employee for each AI coding tool. The new restrictions apply to so-called agentic coding tools, which can write, review and modify software code with minimal human intervention. Uber told Bloomberg that the spending cap is intended to encourage responsible experimentation while ensuring costs remain under control as AI adoption expands across the company.
Notably, the $1,500 limit applies separately to each tool. Employees using multiple AI platforms will receive an individual budget for each service, and those who need additional access can request approval to exceed the cap. Uber has also provided employees with dashboards that allow them to track their AI usage and spending.
Uber’s decision to restrict the use of AI tools, comes only months after Uber aggressively encouraged employees to embrace AI. In April, Chief Technology Officer Praveen Neppalli Naga revealed that the company had already consumed its entire annual AI budget during the first four months of the year. Earlier reports suggested Uber had urged staff to use AI “as much as possible”, with internal leaderboards even ranking employees based on their usage of AI tools.
Uber’s leadership has repeatedly highlighted how deeply AI has become integrated into the company’s operations. Chief Executive Officer Dara Khosrowshahi recently said that around 10 per cent of Uber’s code is now generated and submitted by AI agents. Beyond engineering teams, legal, marketing and other departments have also increasingly adopted AI-powered tools to improve productivity and automate repetitive tasks.
However, the company has also acknowledged that measuring the real business impact of AI remains challenging. Speaking on the Rapid Response podcast, Chief Operating Officer Andrew Macdonald said it was difficult to directly connect rising AI usage with the delivery of more useful features for customers. While internal productivity metrics have improved significantly, he noted that the long-term benefits are still difficult to quantify.
Meanwhile, Uber is not alone in grappling with rising AI bills. As companies move beyond experimentation and begin deploying AI tools at scale, many are discovering that the technology comes with significant ongoing costs. Most advanced AI services operate on usage-based pricing models, meaning expenses rise as employee adoption increases.
Recent reports suggest that Microsoft is also taking steps to rein in AI spending. The company has reportedly restricted internal access to Anthropic’s Claude Code and instructed employees to transition to GitHub Copilot CLI instead. The move primarily affects engineers within the Experiences + Devices division, which oversees products including Windows, Microsoft 365, Outlook, Teams and Surface devices.
Microsoft has reportedly set a June 30, 2026 deadline for the transition, coinciding with the end of its fiscal year.
While Microsoft has publicly presented the change as an effort to standardise its developer toolchain, reports indicate that rising operational costs played a major role in the decision. Claude Code had become widely popular among engineers after its broader rollout in late 2025. However, the heavy token consumption associated with agentic AI systems and complex multi-step workflows reportedly led to soaring costs, prompting Microsoft to prioritise tighter control over its AI tooling and infrastructure.
– Ends
SOURCE :- TIMES OF INDIA
