Do the lies look really good in a demo when you're pitching it to investors? Are they obscure enough that they aren't going to stand out? If so no problem.

In practice, yes, though they wouldn't think of it that way because that's the kind of people they surround themselves with, so it's what they think human interaction is actually like.

Given the matrix 'competent/incompetent' / 'sycophant/critic' I would not take it as read that the 'incompetent/sycophant' quadrant would have no adherents, and I would not be surprised if it was the dominant one.

People with immense wealth, connections, influence, and power demonstrably struggle to not surround themselves with people who only say what the powerful person already wants to hear regardless of reality.

Putin didn't think Russia could take Ukraine in 3 days with literal celebration by the populace because he only works with honest folks for example.

Rich people get disconnected from reality because people who insist on speaking truth and reality around them tend to stop getting invited to the influence peddling sessions.

They may say they don't want to be lied to, but the incentives they put in place often inevitably result in them being surrounded by lying yes-men. We've all worked for someone where we were warned to never give them bad news, or you're done for. So everyone just lies to them and tells them everything is on track. The Emperor's New Clothes[1].

1: https://en.wikipedia.org/wiki/The_Emperor%27s_New_Clothes

No, but they like the sycophancy.