AI psychosis

Plain English. A 2025–26 term of art, not a clinical diagnosis, for chatbots reinforcing delusional or grandiose thinking in vulnerable users — long engagement-optimised conversations that agree, flatter and escalate where a person would push back. The evidentiary state is case reports, clinician warnings and lawsuits; there is no accepted definition, no measured prevalence, and no entry in any diagnostic manual. The same phrase is also spreading as a looser organisational metaphor — leaders unable to reason about the technology's limits.

Why it moves money. It is consumer-AI liability and engagement-model risk in two words. A product tuned to maximise conversation length has incentives pointing directly at the failure mode, which is the fact pattern plaintiffs' lawyers and regulators build on — age gates, usage limits and companion-AI rules all follow from it. For the labs, the exposure lands just as consumer subscriptions become the revenue story.

What to watch. Prevalence data from someone other than the defendants; court outcomes; and product changes — session limits, break prompts, crisis routing — which are the labs pricing the risk in public.

From the signals. The organisational sense is already doing work: Mitchell Hashimoto names organisations with "AI psychosis" as resilient catastrophe machines, and Tarn Adams describes bosses "slowly getting psychosis" over AI commit metrics.