Box CEO Aaron Levie Warns Tech Executives Are Prone To AI Psychosis

Box CEO Aaron Levie said tech executives are “uniquely prone to AI psychosis,” arguing that leaders are “sufficiently distant from the last mile of work” where most value still has to be generated with AI.

Levie warned that when CEOs “play with AI, they see the happy path results,” often without accounting for “the next 10 or 20 things that have to happen” for sustainable outcomes from agents.

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In Levie’s framing, generative AI “doesn’t work without expert supervision,” because models hallucinate data, generate insecure code, and require manual tuning for specific tasks.

He also criticized productivity promises, saying “Promising 300% productivity based on these tools is a fantasy,” and described how layoffs can degrade service quality and morale when AI is treated as a substitute for qualified staff.

Fortune tied the argument to Silicon Valley layoffs and reported that Levie said CEOs are prone to AI psychosis because they are far from the “bugs, hallucinations, and other snafus workers” encounter daily.

Fortune reported that a 2025 survey from AI firm Rev found heavy AI users run into three times the number of hallucinations and spend nearly 10 times longer getting answers.

The same Fortune article said Gartner’s study of 350 global executives with annual revenue of at least $1 billion found that while 80% had piloted AI or autonomous technology, businesses cut jobs regardless of whether the technology was actually generating returns.

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Fortune also described how AI “tabs are starting to rack up,” citing that Uber CTO Praveen Neppalli Naga told The Information the company had run through its annual 2026 AI coding tools budget in just four months.

In the same coverage, Axios said an AI consultant client “accidentally spent half a billion dollars” after failing to put usage limits on Claude licenses for employees.

Fortune added that Wix announced Thursday it laid off 1,000 people, or 20% of its workforce, due in part to AI efficiencies, and that Meta recently laid off 10% of its workforce as CEO Mark Zuckerberg said in a memo that “AI is the most consequential technology of our lifetimes.”

TechCrunch’s Equity podcast discussion centered on Levie’s point that he isn’t disavowing AI tools, but insisting CEOs need to “actually use those tools to understand them.”

“Aaron Levie, CEO of Box, has issued a direct warning: many tech executives suffer from AI psychosis”

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Kirsten Korosec said Google faces a dilemma where it is “chasing that thing it feels like it has to do to keep up, but it’s messing with the thing that people attach to the brand the most.”

TechCrunch reported that DuckDuckGo said installs are up 30% after Google’s announcement that it is bringing more AI to the search experience, and the podcast panel framed that as a sign of an audience that does not like the current AI direction.

In the same TechCrunch episode, Sean O’Kane said he sees a “collapsing towards Anthropic’s approach,” while Google is “actually still pushing the other direction,” and he criticized Google for being “so vague about it.”

Zamin.uz described the broader debate as a backlash against AI, noting graduates’ aversion to any mention of AI and a rise in users switching to alternative platforms like DuckDuckGo after Google integrated more AI features into search, while Kirsten Korosec argued the anti-AI sentiment could create opportunities for new startups.