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The technology has sparked enormous excitement among CEOs, founders and investors—and tremendous fear that they could very quickly get left behind in an upended landscape.

Last fall, Howie Liu, CEO and co-founder of Airtable, arrived at a board meeting with an urgent realization: If Airtable, a maker of collaboration software, wanted to stay relevant, it needed to significantly rethink itself. “We started to feel like the incumbent instead of the disruptor and risked becoming one of the dinosaurs,” Liu said.

The board agreed, and Liu sprinted to put a plan into place. In June, Airtable launched its new product: an AI-powered software for making apps. He describes the motivating force behind his decision to alter his company’s direction as a profound sense of paranoia. “Maybe it’s not the most psychologically healthy way to live,” he conceded. Liu then offered a justification: He thinks he’s in wonderful company. “The founders I admire—even Zuck at the very top—are constantly paranoid.”

Almost no one in tech land seems to feel very at ease these days. Brexton Pham, CEO and co-founder of Ohara, has shifted the focus of his Kleiner Perkins–backed startup from HR and finance operations for startups to AI agents with a mindset that he sums up as “fast, ruthless and experimental.”

“Everybody around me is genuinely guessing: ‘Where do we think the future is going?’” Pham said. “It’s not just, ‘Where is the world going to be in five years?’ I don’t even know what the costs are going to be in six months.”

Even the old hands find themselves blinking in surprise. “The rules of these business models are just so different now,” said Box CEO Aaron Levie. “The speed at which companies are scaling—I’ve never seen anything like this.”

As summer comes to a close, and Silicon Valley prepares to hurtle through the final months of the third year in the great AI boom, the industry has arrived at a moment of strange reckoning, one defined by two emotions often impossible to separate: a sense of enormous excitement—and a feeling of immense anxiety, one that was fueled this week by a market selloff over a viral MIT study that purported to show that nearly all AI projects at U.S. businesses have flopped.

Fear is a familiar state in Silicon Valley. In the 1980s, Andy Grove, the former Intel CEO, expressed his philosophy that business leaders ought to be constantly dangling from tenterhooks in his best-selling book, “Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company.” In the book, Grove described the existential moments that businesses face, which he dubbed strategic inflection points.

Right now, tech is acting like AI could be the mother of all strategic inflection points. It’s a peculiar attitude considering that in some ways, times have never been better.

The tech-heavy Nasdaq sits at an all-time high. The IPO market is finally showing signs of life for the first time since 2022. Eight of the top 10 most valuable companies in the world are from tech, led by Nvidia, a once unremarkable designer of graphics chips.

Meanwhile, OpenAI, which was a little-known research outfit less than five years ago, could quite shortly become the world’s most valuable private company. And these sorts of massive valuations allow the best minds in AI to command salaries that would inspire envy among the most highly compensated film stars.

Yet many of the industry’s leaders seem like they’re on the verge of throwing up in the garbage cans at their desks. Founders and investors are concerned they won’t be able to keep pace with existing competitors who figure out their place in AI—and any newcomers who might unexpectedly materialize. “You’re seeing almost every founder sit there and shiver in their boots that the next ChatGPT model is just gonna do what their entire company and app has done,” investor Adrian Aoun said in an appearance on The Information’s TITV.

“I have a really high sense of urgency,” acknowledged Nicolas Kopp, whose AI startup, Rillet, closed a Sequoia Capital–led $25 million round in May followed by an additional $70 million round two months later. “Every 15-minute slot has a certain price tag in my mind—like, everything’s fàcking urgent.”

The AI anxiety has spread beyond corner offices to the rank and file, too. Tech employers have laid off tens of thousands of staffers as their leaders look for savings to pay for massive spending on AI—or attempt to show customers how efficient AI can make their own businesses. At the same time, the giant paydays for AI researchers are establishing a new caste system that drastically favors anyone with experience in the field—and that is upending the daily rhythms of corporate life.

At Google, for instance, product managers are starting to be asked to vibe-code a prototype rather than just write a document outlining product requirements, according to a Google Cloud employee now in that situation.

At some companies, managers are breathing down the necks of employees to use AI to produce more, even though in practice the technology isn’t quite good enough yet. With the addition of AI coding tools, executives expect product development to be moving far faster—but much of the AI-written code is too buggy to deploy, and many other bottlenecks related to product reviews or other procedural elements can’t just be AI-generated away, according to a current LinkedIn employee.

And even when the riches do arrive, not everyone walks away buoyant. One Windsurf employee was plucked to join Google DeepMind as part of Google’s $2.4 billion deal with the startup, but their direct reports and interns were left behind. They described having mixed feelings when they heard the news. “It’s a weird situation because someone says, ‘Here’s a really good job for the next four years.’ What’s going to happen to all your friends? I don’t know. They’ll figure it out,” they said.

Reid Hoffman, the billionaire venture capitalist, sees the moment as nothing less than a “cognitive industrial revolution” that has forced his peers and colleagues to reconsider everything around them. As he put it: “Transformations are painful.”

Much has been said lately about the apparent decline in alcohol consumption among young people. Among some in Silicon Valley, boozing—along with pretty much any other form of recreation—seems to be now losing out to a relentless, AI-inflected grind.

“I live at the office—I probably work 100-hour weeks,” said Max Marchione, the 25-year-old co-founder and CEO of Superpower, a health startup that hopes to develop the equivalent of an AI-powered physician. “I will say no to more things. I won’t travel. I won’t take vacation.”

He went on. “The thing I say often is that I will sacrifice and give up more in the short term because there’s a sufficiently high chance AGI is here sooner than we think,” he said. “I feel more pressure in life than ever before.”

Masha Bucher, founder and general partner of Day One Ventures, has seen plenty of people acting just like Marchione. “Most of the best companies I’ve invested in work at least six days a week—and a half-day on Sunday. The founders sleep in the office. Some companies will have tents in the office,” she said. “It’s just that competition is so high and the pace is so high.”

While AI has become everyone’s preoccupation, it’s how many businesses are generating substantial, durable revenue from the technology—a paradox undoubtedly fueling additional worries: With so much capital invested in pursuit of commercializing the technology, companies will soon need to show those investors they can actually do so.

That’s been a more elusive goal than the surface-level excitement suggests. On that note, here’s an example of a number that sounds great but isn’t: Annualized revenue for “AI native” firms selling models or apps surpassed $15 billion in June, according to The Information’s Generative AI Database. The figure has surely increased since, but the reality undoubtedly remains that more than 85% of that sum flowed to just two companies: OpenAI and Anthropic.

Keith Rabois, the Khosla Ventures investor, has been wondering aloud lately how many of the businesses running pell-mell toward AI can come away with much—and that presents a challenge to the venture capital industry, which has largely come to focus on little else than AI.

“You have to isolate, if you’re a venture capitalist or an entrepreneur, where your differentiation is,” Rabois said while appearing on The Information’s TITV. “What’s durable? What’s sustainable? And with the rapidly emerging tech landscape, it’s not so obvious.”

Over at Airtable, Liu thinks the company’s altered focus on AI will lead to a more explosive level of growth than if the business had continued to concentrate on collaboration software. The move into AI is important enough that Liu is willing to trade some of the roughly 90% gross margins on his collaboration software in favor of an AI product he acknowledges will be far costlier to sell. “It could hurt our margins as we get more AI usage,” he said. “That’s a trade-off.”