Stay, but actively look for other opportunities. It’s a miserable tech job market right now; hunkering down and continuing to collect a paycheck is something you shouldn’t take for granted.

As others have said, use this opportunity to learn about what works w/ AI based on all the crap that doesn’t. Your C-level execs have given you carte blanche to fuck around, without worrying too much about the immediate-term consequences. If they literally said to delete existing test files & generate new ones using AI, do it! And when shit inevitably goes sideways, you’ll be able to spend more of your salaried time rewriting those tests to probably look & work more like the original tests that you deleted.

And while you’re learning to use AI, you’ll be burning the company’s funny-money on AI usage fees. At some point, they’re gonna realize they don’t have a lot to show for all the money that was thrown away in service of doing what they told employees to do. At which point, they’ll take a more measured & pragmatic approach towards using AI. Do everyone a favor & help them get to that point sooner than later.

I fear that when the CFO and CEO will walk in holding a hammer and a saw, the CTO will start blaming the Directors for not "maximizing value" by "misusing" AI.. because why blame the tech when you can fire 20 more devs/engineers and hire 20 more eager and cheaper ones...?

As for the long term consequences.. I suggest "in front of your nose" by Orwell.