No idea if this is true but very sad if it is. This is a great argument for the concept of tenure, so experts can work on what they as experts deem important instead of being subject to the whims of leadership. I, probably naively pictured Distinguished Engineer to be closer to that, but maybe not.
Sadly, yes, it's true. New AI projects are getting funded and existing non-AI projects are getting mothballed. It's very disruptive and yet another sign of the hype being a bubble. Companies are pivoting entirely to it and neglecting their core competencies.