Box CEO Aaron Levie warns tech leaders suffer from 'AI psychosis'

Box founder Aaron Levie has coined the term 'AI psychosis' to describe tech CEOs who overestimate AI capabilities due to their distance from hands-on work. In a post on X, Levie argued that executives see only 'happy path' results from AI prototypes and ignore the complex, unglamorous tasks required for real value. Despite being an AI advocate and angel investor, Levie urges CEOs to use AI extensively to understand both its potential and limitations. The warning comes amid a wave of tech layoffs: 115,430 people have been laid off from 152 tech companies in the first five months of 2026, nearly matching the 124,636 layoffs in all of 2025. Many firms cite AI as a reason for cuts, though critics accuse them of 'AI washing.' ClickUp CEO Zeb Evans laid off 22% of staff after deploying 3,000 AI agents, claiming it creates a '100x org.' However, research challenges AI productivity claims: a meta-analysis in UC Berkeley's California Management Review found no robust link between AI adoption and aggregate productivity gains. MIT researchers predict AI will handle most text tasks at 80-95% success by 2029, but still need years to outperform humans. Levie warns that unchecked CEO AI psychosis will lead to organizational chaos.