Industry intelligence for people leaders

ISSUE NO. 39 · WEEK 40, 2026

HR Leadership Weekly

Industry intelligence for people leaders

Year in Review: AI Psychosis, Agent Arms Races, and the 2026 Workforce Inflection Point

7 min read

Published: May 31, 2026 | By Senior HR Tech Correspondent

As Memorial Day weekend closes out the second quarter of 2026, the tech industry has delivered a remarkable week of headlines that collectively paint a picture of an HR technology landscape in the midst of a structural transformation. The themes emerging from May 25-31 go beyond individual company stories — they represent the broad currents reshaping how companies hire, manage, and deploy talent.

The AI Psychosis Debate

Perhaps the most culturally significant discussion of the week was the debate over “AI psychosis” — a term that emerged to describe the phenomenon of tech executives becoming so enamored with AI that they begin making irrational strategic decisions based on it.

On May 27, TechCrunch published an article documenting how tech CEOs are apparently suffering from AI psychosis, followed on May 29 by a video exploring the question with Box CEO Aaron Levie, who thinks most of them do. By May 31, the debate had deepened with an analytical piece trying to make sense of it all.

The HR implications are significant. When CEOs believe AI can transform their companies overnight, workforce planning becomes reactive rather than strategic. Companies rush to adopt AI tools before they understand what problem those tools solve, then lay off employees based on unproven efficiency projections.

ClickUp’s Zeb Evans is the poster child for this phenomenon. His announcement that the company is replacing hundreds of employees with 3,000 AI agents — while simultaneously promising million-dollar salary bands for those who “create outsized impact using AI” — is a classic example of AI-driven strategic whiplash. Employees are told they will be rewarded for embracing AI while simultaneously being replaced by it.

The Coding AI Revolution

The week also reinforced the seismic shift in software development brought by AI coding agents. The narrative has evolved from “AI writes some code” to “AI writes most code,” and the implications for HR tech are profound.

At Remote, more than 85% of all code written in the last month was generated by AI, with engineering contribution volume up more than 60% year over year. At Cognition, the AI coding startup that raised $1 billion at a $25 billion pre-money valuation on May 27, CEO Scott Wu argued that AI coding agents shouldn’t replace humans — a nuanced position that acknowledges AI’s power while preserving the case for human oversight.

Meanwhile, coders are reportedly refusing to work without AI, according to a May 29 TechCrunch piece. The dynamic has shifted: it is no longer a question of whether developers will use AI coding tools. It is a question of which companies can afford to let their developers opt out.

This trend has direct HR implications. Software companies that once hired based on coding proficiency may soon need to hire based on AI supervision ability — the capacity to direct, review, and validate AI-generated work. The skill profile of the ideal software engineer is being rewritten in real time.

The AI Agent Infrastructure Arms Race

Beyond individual companies, the infrastructure that supports AI agents is becoming its own industry. Several stories from the week highlight this trend:

  • Asana acquired no-code agent-builder StackAI on May 28, signaling that productivity platforms are racing to become AI agent orchestration layers.
  • Remote launched Remote MCP on the same day, creating a standards-based interface for AI agents to access payroll and compliance data — potentially making the HR platform itself invisible.
  • Visa invested in Replit on May 28 to power agentic payments for developers, expanding the use case for AI agents beyond coding into financial operations.

These moves suggest that the AI workforce of 2026 is not just a collection of employees using AI tools. It is a hybrid workforce of humans and AI agents, each with their own access patterns, security profiles, and cost structures. HR technology needs to evolve to manage both.

The Valuation Bubble and the Reality Check

The week’s most staggering financial headline came on May 28, when Anthropic raised $65 billion at a $965 billion valuation. This is not an isolated incident. The broader venture market has seen extraordinary valuations: ClickUp at $4 billion, Cognition at $25 billion, Stord at $3 billion, and Corgi at $2.6 billion — with valuations doubling in weeks.

The danger, as Gartner’s data suggests, is that these valuations are predicated on productivity promises that have not yet been independently verified. Remote’s 300% YoY payroll growth and 50% revenue-per-employee increase are self-reported. Anthropic’s $47 billion run rate is impressive, but the company is also burning through billions in compute costs.

For HR leaders, the takeaway is clear: AI is transforming the workforce, but the timeline and scope of that transformation remain uncertain. Companies that treat AI as a strategic investment while managing workforce expectations carefully — like Remote — are better positioned than those that use AI as an excuse for dramatic restructuring — like ClickUp.

The Broader Workforce Picture

Several other stories from the week add important context:

  • Black founders raised the highest amount of quarterly funding since 2022, according to a May 31 report, though the article noted there’s a catch. AI companies dominate the fundraising landscape, and the demographic composition of AI funding remains a question for the industry.
  • GitHub Copilot’s new token-based billing drew criticism from developers on May 30, highlighting the friction between AI cost management and developer experience — a tension that HR tech vendors need to address.
  • Google’s Gemini Spark was reviewed as “actually pretty useful” on May 30, suggesting that 24/7 AI assistants are becoming viable for enterprise use.
  • The Robinhood AI trading launch on May 27 — letting AI agents trade stocks — demonstrates that agentic AI is expanding beyond text-based tasks into financial decision-making, a space with direct parallels to workforce compensation and benefits management.

The Year-in-Review Takeaway

Looking back at the first half of 2026, the narrative is clear: AI is no longer a promise for the future. It is an operational reality reshaping how companies manage their most important resource — people.

The companies that will thrive in this new environment are those that combine AI adoption with genuine workforce strategy: upskilling employees to work alongside AI agents, measuring real productivity gains rather than token consumption, and building HR infrastructure that can manage a hybrid human-AI workforce.

The ones that simply use AI as a cost-cutting excuse — like ClickUp’s aggressive approach — will face investor scrutiny and employee skepticism. The ones that treat AI as a workforce multiplier — like Remote — will set the standard for the next decade of work.

As Memorial Day weekend closes out this remarkable week, the question for HR leaders is not whether to embrace AI. It is how to embrace it strategically, sustainably, and in a way that benefits both the company and the people who make it successful.

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