Tech CEOs are apparently suffering from AI psychosis

techcrunch.com May 27, 2026

Tech CEOs are apparently suffering from AI psychosis

Curated by Shubham · TechCapsules · May 27, 2026

AI-summarised brief · reviewed before publication

Tech CEOs, particularly those in the industry, are reportedly suffering from "AI psychosis," a phenomenon where they overestimate the capabilities of artificial intelligence. According to Box founder Aaron Levie, CEOs are prone to this condition due to their distance from the actual work that needs to be done to generate value with AI. This has led to mass layoffs in the tech industry, with nearly 115,000 people let go in the first five months of 2026, citing AI as a reason for the cuts.

💡 Why It Matters

· The tech industry's reliance on AI may be masking underlying business issues, with some companies using AI as a scapegoat for layoffs.
· Research suggests that AI adoption has not led to significant productivity gains, contradicting claims made by some CEOs.
· This highlights the need for a more nuanced understanding of AI's capabilities and limitations.

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