Cognitive Warmup. A Pizza Hut franchisee, which operates more than 110 Pizza Hut outlets in North America, is suing the restaurant giant for using AI that has slowed down the once high-performing outlet, resulting in delays that have impacted sales, seen customer satisfaction decline and generally created chaos for restaurant operations. Chalk’s Pizza Northeast, which operates stores in New York, New Jersey, Maryland, Pennsylvania and Washington, DC, is seeking $100 million in compensation for the chain’s Dragontail AI dispatch system.
The lawsuit says the AI system provided DoorDash drivers with unusual transparency into specific kitchen operations, allowing them to interfere with the system by delaying pickups, stringing together deliveries and selectively taking higher-tip orders. The franchise says that before this AI system, more than 90% of its pizza deliveries reached customers within 30 minutes. The topic of our conversation this week is big. The price and value of intelligence. Many people do not realize that the two are different.
First on Neural Dispatch
“Don’t use AI just for the sake of using AI”
Yes, you read that right. “Don’t use AI just for the sake of using AI.” The words of Amazon executive Dave Treadwell in an internal communication with employees, which were widely reported last week. Probably the smartest thing I’ve heard an AI executive say in a long time. But do you know why we reached this point? Because inspired by the enthusiasm, Amazon at some point set up an internal leaderboard system that tracked employees on AI usage.
Hint, some workers started employing AI agents (as you may know from our previous conversation, these are autonomous AI bots that can automatically perform certain user-defined tasks). Turns out, most of the works were extensive collections that weren’t needed at all, or were meaningless in the grand scheme of things. The mission, to climb those ranking boards, was implemented by Amazon. This happens when an unnecessary sense of competition is injected into the workplace culture to further a narrative. Clearly, the cost of AI (which no one talked about in the excitement of replacing humans) is significantly higher than paying actual humans.
AI bills are exorbitant
AI costs more than the humans it seeks to replace. Turns out, companies can no longer hide this reality. In a way, big people are the first to fall. In December, Microsoft began pushing its own developer teams to use more AI, including Anthropic’s Cloud Code, by now putting cancellation dates on those subscriptions for employees. Turns out, it was a popular device and its cost was proving a bit high for Microsoft. They want their developers to use the Copilot CLI instead.
Here’s a little information – June 30 is the last day of Microsoft’s fiscal year. Canceling cloud code licenses at that cutoff helps them cut some operating expenses, before their new fiscal year.
They are not alone.
Uber is believed to have completed its entire budgetary allocation for AI in 2026 in just four months. “If you’re not able to really communicate how (many) useful features and functionality you’re providing to your users, it becomes harder to justify that tradeoff,” Andrew MacDonald, Uber’s president and chief operating officer, said in an interview. Uber had deployed AI agents to its engineers (believed to be around 5,000). It’s getting pretty hard to explain these AI usage bills, isn’t it?
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Some of you may remember, a few weeks ago, we talked about an Nvidia executive saying that “the cost of compute far exceeds the cost of employees”. The next time this executive ran into Jensen Huang in the corridors of Nvidia’s headquarters, I felt like being a fly on the wall. And now I wonder how soon the blame for using too much AI will be placed on humans?
