Oh, yeah, I mean that's what happens in the short term. Long term, I suspect it's either a quiet climb down from his current position, or a complete engineering disaster for the company if he's unwilling to do so.
At least the interim lying buys him more time to accept reality. If AI starts actually writing 50% of the code, I assume it asymptotically tends towards a codebase that no human beings actually want to work on.
Nice idea but I don't think it will work for very long.
This CEO's real objective is a significant cost reduction from the magic "coder in a box". Just giving it credit won't achieve this.
Those who were afforded the opportunity to work for a different CEO may not realize it yet but things may ultimately turn out in their favor.