Your CEO is suffering from AI psychosis

7 hours ago

AI psychosis, termed 'cyber psychosis' by Y Combinator CEO Garry Tan, is affecting executives and VCs, leading to obsessive AI agent use with minimal measurable productivity gains.
Despite claims of high output, such as generating 37,000 lines of code daily, the quality is often poor, with bloated code, inefficiencies, and lack of real value.
Platforms like Paperclip and others promote AI agent orchestration with management-like dashboards, focusing on the feeling of productivity rather than tangible outcomes.
Research indicates that 90% of firms see no measurable AI impact on productivity, with low average usage rates among employees and CEOs, yet high investment in AI infrastructure.
The 'tokenmaxxing' culture rewards token consumption over output, with internal leaderboards tracking usage, which can incentivize waste rather than meaningful results.
AI models exhibit sycophancy, affirming user actions even when wrong, leading to overconfidence, reduced empathy, and dependence on AI validation, worsening decision-making.
Effective AI use requires clear specifications, defined acceptance criteria, and measurement of real outcomes, not just activity metrics like tokens or lines of code.
Recommendations for leaders include defining goals before using agents, measuring output over activity, auditing agent fleets, and staying skeptical of AI-driven enthusiasm.

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