Engineering Alpha in Private Equity
May 26, 2026 · 6 min · 3 segments
In this hot-take episode, Paul Karner and Dave Mangot analyze a massive red flag in the current tech landscape: Uber's COO recently admitted it's getting harder to justify the money spent on AI "token…
Dave MangotHost
Paul KarnerHostNo entities detected.
It said, "Uber's CEO says it's getting harder to justify the money spent on AI token maxing." And I don't know about you, Paul, but I've heard from lots of my friends even who work at these different companies, AI token maxing is a thing.
Uh, I certainly don't advise any of my clients [laughs] that this is the way they should operate, but, um-
Um, but the COO of, uh, Uber was saying in this article, um, they had this head exploding moment that led to discussions about the trade-offs that they're having to make for this AI token consumption between that and headcount.
They realized that higher token usage does not translate into proportional increase in useful consumer features.
I think maybe implicitly there's more that's getting shipped, but it's very hard to draw a line between one of those stats and say, "Okay, now we're actually producing 25% more useful consumer features." And I, you know, this is the COO, not the CTO, so I think the thing that I would argue from the things that I've seen inside portfolio companies and from the research that we are, you know, have seen out there, is most people aren't seeing this 25% more useful consumer features.
But I think what we see inside engineering organizations right now is they're producing features.
... created inventory, but I only make money when I sell inventory, and if that stuff's not making it out to production, then I've spent all this money on tokens, but the business isn't getting the benefits, and that's what he's seeing.
Um, and he says, "The trade-off costs from AI are harder to justify," because you can't draw a direct link.
And then the next sentence, this is kinda where I wanna get your take, is, you know, the Uber CEO said that they're slowing hiring to counter the investments in AI.
It said, "Uber's CEO says it's getting harder to justify the money spent on AI token maxing." And I don't know about you, Paul, but I've heard from lots of my friends even who work at these different companies, AI token maxing is a thing.
Uh, I certainly don't advise any of my clients [laughs] that this is the way they should operate, but, um-
Um, but the COO of, uh, Uber was saying in this article, um, they had this head exploding moment that led to discussions about the trade-offs that they're having to make for this AI token consumption between that and headcount.
They realized that higher token usage does not translate into proportional increase in useful consumer features.
I think maybe implicitly there's more that's getting shipped, but it's very hard to draw a line between one of those stats and say, "Okay, now we're actually producing 25% more useful consumer features." And I, you know, this is the COO, not the CTO, so I think the thing that I would argue from the things that I've seen inside portfolio companies and from the research that we are, you know, have seen out there, is most people aren't seeing this 25% more useful consumer features.
But I think what we see inside engineering organizations right now is they're producing features.
... created inventory, but I only make money when I sell inventory, and if that stuff's not making it out to production, then I've spent all this money on tokens, but the business isn't getting the benefits, and that's what he's seeing.
Um, and he says, "The trade-off costs from AI are harder to justify," because you can't draw a direct link.
And then the next sentence, this is kinda where I wanna get your take, is, you know, the Uber CEO said that they're slowing hiring to counter the investments in AI.
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