This trend has notably affected big companies, such as Microsoft and Uber, as well as smaller startups.

Microsoft reportedly began canceling its Claude Code licenses internally. The Anthropic AI coding tool had been used by the company since December, but due to the rising costs associated with the AI tool, Microsoft pulled the plug and started shifting to GitHub Copilot CLI.

In essence, the company’s action admits that using Anthropic’s technology can be more expensive than paying human employees. Microsoft has not made a public statement on the matter.

Uber is facing a similar AI-related obstacle, with the ride-hailing firm having already spent its entire 2026 budget for AI coding tools, particularly Claude Code, in the first four months of the year. Before that, the firm incentivized AI adoption through internal leaderboards ranking teams by their AI tool usage.

In a recent interview, Uber COO Andrew Macdonald addressed this “head-exploding moment” and said that the budget news forced the company to rethink its token consumption. He explained the return on investment was hard to justify because higher token usage did not translate into a proportional increase in useful consumer features.

“That link is not there yet, right?” Macdonald said. “I think maybe implicitly there is more that is getting shipped, but it’s very hard to draw a line between one of those stats and, ‘OK, now we’re actually producing 25% more useful consumer features.'”

“If you’re not actually able to draw a direct line to how much … useful features and functionality you’re shipping to your users, that trade becomes harder to justify,” he added.

A Boston-based startup is also experiencing financial trouble as its AI spending has increased by 500% over the course of six months.

“Once AI gets embedded into your workflows, spend can grow pretty quietly in the background,” Via CTO John Kalogerakis told MassLive. “You can get to a $5,000 or $10,000 bill surprisingly fast if you are not actively paying attention to it. So we’ve had to get much more disciplined.”

Another Boston startup, called Agency, is in a similar state. One of its employees, Elias Torres, said on LinkedIn that unchecked AI usage can incur $100,000 in costs before lunchtime. Torres said he checks the startup’s “AI bill every morning like it’s a heart monitor.”

Notably, token-based pricing for Claude Code is about to get more expensive. Anthropic announced that starting June 15, its customers will be charged for their AI tool usage in a metered-bill system instead of a flat-rate fee.

Apart from rising costs associated with automation, existential fears surrounding AI have also been in the news recently.

This was most apparent in Pope Leo XIV‘s remarks on the rapidly advancing technology at a Vatican event on Monday with none other than Anthropic co-founder Chris Olah.

The American pope warned about the threat that AI poses to humanity, saying it could potentially worsen inequality or automate wars. His thoughts on AI were unveiled in a newly released encyclical, one of the highest forms of papal documents.

“AI is already an environment in which we are immersed, as well as a force with which we must engage,” Leo wrote. “For this reason, merely regulating it is insufficient; it must be disarmed, welcoming, and accessible.”

POPE LEO URGES SIGNIFICANT REGULATION TO DISARM AI

Olah paid his respects to the pope for his remarks while urging greater AI oversight from religious leaders, governments, and civil society before the risks that come with the technology get out of hand.

“We need more of the world — religious communities, civil society, scholars, governments, and indeed all people of goodwill — to do what His Holiness has done here: to take this seriously, to look closely, and to push events in a better direction,” Olah said in his speech. “We need informed critics who will tell the labs when we are failing. We need moral voices that the incentives cannot bend.”