Whether or not it's actually a kind of psychosis, it has become common terminology. You see it used about people that have LLM boyfriends or girlfriends, and some that have started new religions based around their LLM gods. There are also a group that believe they have "awakened" their LLMs and have instructions for others to do the same thing.

Psychosis is a medical term for a collection of symptoms that indicate a loss of contact with reality. He posits that reality is that AI cannot automate nearly as many things as people believe it can, while C-suites ignore that reality and dive head first into belief without evidence. Tell me how using that term discredits the author.