There's a wildness in the tech industry these days that mimics past eras of large changes, like cloud computing. But this time, CEOs are reportedly seeing AI as something more than just a tool—some believe they're suffering from delusions of grandeur.

The Box founder Aaron Levie even went public with his thoughts on CEO ‘AI psychosis’. He suggests that these executives lack the necessary knowledge to understand what can and can’t be automated, yet they still make big decisions based on their beliefs. This is problematic because many CEOs aren't directly involved in the day-to-day code review or model training.

In just five months of 2026, tech companies have laid off over 115,430 people compared to 124,636 in all of 2025. Many blame AI for these cuts. Zeb Evans, CEO of ClickUp, is one example; he claims that after deploying 3,000 AI agents, he laid off almost a quarter of his employees.

However, data from various studies suggest that while AI can be useful, it’s not the productivity panacea many hope for. A meta-analysis found no robust relationship between AI adoption and productivity gains. Meanwhile, MIT research predicts that by 2029, LLMs will perform most text-related tasks at a minimally sufficient quality level.

So, are tech CEOs ready to face the reality of AI's limitations? If not, organizational chaos may be inevitable as everyone gets empowered but few have the authority to approve all the stuff being produced.