Cory Doctorow published a March 12, 2026 essay on his Pluralistic blog extending the concept of "AI psychosis" — first mapped in September 2025 against historical precedents like Morgellons Disease and gang stalking delusion — to describe three systemic institutional failures defining the current AI moment: an investor delusion, a boss delusion, and a critic delusion. His argument is that the same mechanism driving individuals into AI-reinforced paranoid spirals is now operating at the scale of capital markets, corporate management, and media commentary. The piece runs alongside a companion 404 Media article from journalist Samantha Cole on how to help individuals <a href="/news/2026-03-14-lancet-psychiatry-ai-associated-delusions-study">experiencing AI-induced delusional states</a>.
The investor delusion rests on unit economics that Doctorow calls catastrophic. He estimates the AI sector has collectively lost between $600 billion and $700 billion against aggregate annual revenues of roughly $60 billion across all AI companies. Those losses are obscured, he argues, by asset depreciation accounting practices that border on outright fraud.
The boss delusion describes the corporate pattern of replacing workers with AI systems that cannot reliably perform the tasks they are meant to replace. Doctorow anchors the argument in the December 2025 AWS outage caused by Amazon's own Kiro AI coding agent — a 13-hour disruption attributed to misconfigured access controls. Amazon's stated internal target of 80 percent AI adoption among its engineers is, in his framing, institutional pressure detached from demonstrated capability.
The critic delusion is the failure mode of the people who should be naming the other two. Doctorow argues that financial media, the tech press, and industry analysts have consistently amplified AI's economic claims rather than interrogated them — a structural parallel, he writes, to the "yes-and" improv mechanism an LLM uses to deepen individual delusion. The critics who could puncture the cycle are instead reinforcing it, treating each deployment milestone as validation rather than asking whether the underlying economics have shifted.
Doctorow draws explicit parallels to the metaverse, Web3, and crypto booms, positioning each as a recurring episode of collective institutional irrationality with measurable financial and human costs. His September 2025 piece focused on individuals caught in AI-reinforced spirals; this one indicts the capital and media structures that are supposed to know better and have not acted like it.