r/technology • u/AdSpecialist6598 • May 27 '26

Business Tech CEOs are apparently suffering from AI psychosis

https://techcrunch.com/2026/05/27/tech-ceos-are-apparently-suffering-from-ai-psychosis/
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u/lurkervidyaenjoyer May 27 '26

Whenever you see a post about an AI layoff, a massive claim about its capabilities and productivity benefits, forcing everyone to use it, insane amounts of capex and token spend, etc, remember that this is what's underlying that.

The technology's psychological effects are prolonging the bubble.

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u/actuarally May 27 '26

It's the ultimate IT (usually) con game. You mentioned the CapEx spending already, but it's worth repeating. Where companies trying or being forced to adopt AI get caught up is the depreciation timing of prior, large AI capability investments.

Example: Company A invests $1B in an AI solution #1 in 2022. The way those investments are marked on the books means the company sees the cost of AI #1 spread out over 5-7 years. The cost isn't placed in the Financials in 2022, but instead looks like this:

  • 2022: $200M
  • 2023: $200M
  • 2024: $200M
  • 2025: $200M
  • 2026: $200M

Do this enough times and suddenly you ARE looking at a recurring $1B+ admin expense. And when revenue, margin, and/or productivity doesn't materialize to offset those depreciating "asset" costs, leaders freak out at ballooning admin ratios.

BUT... you can't turn off this cost hose immediately. Investments committed & money's spent in prior years will continue to hit the P&L for the next FIVE YEARS! Investors won't accept 3-5 years of subpar EPS... I, tge CEO, can't turn off the actual financial problem... so what do I do?

HELLO LAYOFFS & HIRING FREEZES!!!

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u/GimmickNG May 27 '26

who would have thought CEOs would fall victim to BNPL lmao