Tech CEOs are suffering from AI psychosis.
That's the diagnosis from Box founder Aaron Levie, who went viral with a critique of how Silicon Valley's leadership misunderstands AI capabilities. According to reporting from TechCrunch, Levie posted on X that CEOs are "uniquely prone to AI psychosis because they're sufficiently distant from the last mile of work that still has to happen."
Executives test a few AI prototypes, generate a contract or two, and assume the technology can solve any problem. Meanwhile, engineers review code, hunt bugs, and catch hallucinated library calls before anything ships.
CEOs don't work through idiosyncratic contract terms or train models on company-specific data. They don't live in the messy reality of what AI can and cannot do. Yet they're acting on these assumptions anyway, with serious consequences.
This year alone, the tech industry laid off 115,430 people across 152 companies in five months, largely justified by AI automation claims. That nearly matches all of 2025's layoff numbers.
Levie isn't an AI skeptic. He backs AI startups as an angel investor and posts regularly on AI's promise to his 2.7 million X followers. He has written pieces defending AI as the future. His advice to fellow CEOs is direct: use AI extensively, get your hands dirty, and understand both the real upside and the genuine work remaining.
"I have enough faith in humanity to believe that there are CEOs out there attempting to do just that," Levie noted, "but right now, they seem to be in the minority."
Most are making trillion-dollar decisions based on a prototype that worked once in a demo.
