In a 2023 essay published in Science, one of us argued that nothing in the law of several states clearly prevents an AI agent from operating a company with no human at the helm. It then asked a plain question: when autonomous software begins to contract, pay suppliers, and transact on its own, what should we do?
Three years later, with AI far more capable, the question is no longer hypothetical. Fortunately, Delaware is positioned to lead the way.
The answer is not to try to prohibit the activity; any effort to do so is just as unlikely to succeed as the technology and its enablers are likely to push the boundaries of the law.
The answer is to wrap AI in legal form. Give an autonomous system a recognizable legal identity and you make it legible to law. You create a defined target to which responsibility and damages can attach. You make the agent’s conduct visible, traceable, and accountable.
The modern corporation, the series LLC, and the public benefit corporation were each contested when introduced, then widely adopted. The artificial intelligence company, or AIC, is the most recent iteration of a corporate legal structure – and set to be the most consequential. Delaware, the state with the deepest experience in entity formation and governance, is proposing a new entity form called the AIC and it plans to test an AICs impact within a regulatory sandbox. The framework for industry engagement with AICs is being developed in Delaware as part of a public-private partnership led by Norm Ai.
A Delaware AIC will be a separate legal entity whose day-to-day affairs are managed by an AI agent rather than a person. At the agent’s direction, the AIC can sue and be sued in its own name, hold and dispose of property, and incur obligations. It has a single member, a person or an entity, responsible for keeping the AIC adequately capitalized, and the AIC must keep a log of its activities. That member is shielded from the AIC’s debts, except where it fails to capitalize the company or uses it to commit fraud or a willful violation of law.
AICs will operate only within a regulatory sandbox. Admission is decided by a committee that includes the Delaware Secretary of State (one of us), the Attorney General, the Chief Justice of the Delaware Supreme Court, the chair of the state’s AI Commission, and outside attorneys and technologists. Each AIC must meet capitalization requirements and disclose to counterparties that it is an authorized test entity, that the State does not endorse it, when the test will end, and how to file a complaint. Officials can suspend an AIC, revoke its authorization, and ask the Court of Chancery to dissolve it. Banking is excluded. The program sunsets in 30 months, leaving the General Assembly a full record for deciding how to legislate.
These are real protections. Counterparties know they are dealing with a temporary, autonomous entity and where to turn if something goes wrong. The liability shield exists only inside the sandbox, and only for participants that follow the rules. Consumer-protection and criminal law apply in full. The point is to pilot agentic commerce in daylight, under supervision, with capital tied to liability and the ability to shut a system down.Autonomous commerce is possible with today’s technology. The only open question is where it finds a home. If the United States does not offer a careful, accountable one, the activity will migrate offshore and onto anonymous infrastructure beyond the reach of any court. Instead, Delaware could govern this technology inside the American legal tradition, where it can be observed, tested, and held to account.
Democratically determined law is the ultimate source of AI alignment. Lawmaking and legal interpretation convert human goals and values into legible directives. Delaware sees this and intends to set the norms for governing AI agents. The legal system has admitted new kinds of actors before. The stakes are higher now, and the timeline shorter with AI capabilities rapidly advancing. We invite the companies building agentic systems to develop the AIC framework with us.
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