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Microsoft AI Chief Warns of “AI Psychosis” as Coinbase CEO Forces Engineers to Adopt AI
samour ankit
August 25, 2025
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Microsoft’s Mustafa Suleyman raises concerns
Microsoft AI Chief Mustafa Suleyman has expressed deep concern that advanced AI systems are becoming so lifelike that people may start believing they are conscious. Speaking about a phenomenon he called “AI psychosis,” Suleyman warned that users could begin treating AI like gods, lovers, or digital persons, leading to demands for AI rights, welfare, or even citizenship.
In a blog post last week, he wrote:
“My central worry is that many people will start to believe in the illusion of AIs as conscious entities so strongly that they’ll soon advocate for AI rights, model welfare, and even AI citizenship.”
Research backs his fears. A study by EduBirdie showed that 25% of Gen Z already believe AI is conscious, while most others think it will soon be.
Suleyman stressed the urgent need for guardrails around AI companions, saying that these systems must be built to support people, not to become digital persons. He emphasized the risks of unhealthy attachments and warned that without safeguards, society may misuse AI in damaging ways.
Coinbase’s Brian Armstrong: “No AI, No Job”
On the other side of the debate, Coinbase CEO Brian Armstrong has taken a hardline approach to AI adoption. He revealed that he fired engineers who refused to learn and use AI coding tools such as GitHub Copilot and Cursor, even after the company purchased enterprise licenses.
Armstrong set a one-week deadline for onboarding AI tools. Those who failed faced direct meetings with him—and some were terminated.
“AI’s important. We need you all to learn it and at least onboard. And if not, I’ll meet you personally to understand why,” Armstrong wrote in a company-wide message.
This strict policy has already changed the company’s workflow. Armstrong said that 33% of Coinbase’s code is now AI-written, with a goal of reaching 50% by the end of this quarter. To ensure quality, the company runs monthly “AI Speed Runs,” where top-performing engineers train others.
Despite criticism of his “heavy-handed” style, Armstrong defended the approach, saying clarity was necessary. He also acknowledged that human oversight remains critical in finance, since “you don’t want AI vibe-coding systems that move money.”
The Bigger Picture
Microsoft’s Suleyman is focused on the social and psychological risks of AI, warning against illusions of machine consciousness.
Coinbase’s Armstrong represents a corporate shift toward mandatory AI adoption, linking it directly to job security.
Experts estimate AI could add up to $4.4 trillion annually to the global economy by 2030, making it one of the most transformative technologies of the century.