Can AIs soon run businesses?

Artificial intelligence (AI) systems are on the cusp of being able to operate businesses, presenting unique challenges for the legal system. These AI entities, or "artificial persons," may not always serve human interests, which raises questions about regulating AI within existing legal frameworks and assigning legal responsibility for their autonomous actions. One potential solution is to teach AI to be law-abiding entities.

While the laws governing entities like limited liability companies (LLCs) in some US states do not currently require human oversight, this legal framework may inadvertently allow for AI-operated LLCs. AI has already taken on various roles within companies, handling tasks such as financial operations, human resources, and legal reasoning, and this trend is likely to grow.

AI and Human language  

The legal system traditionally only recognises humans as legal subjects due to language being a uniquely human invention and an essential part of the legal framework. However, AI's increasing ability to understand human language opens the door for AI to interact with the legal system. AI has demonstrated proficiency in tasks like tax law advice, lobbying, contract drafting, and legal reasoning.

An AI-operated LLC, if permitted by even one US state, could potentially operate nationwide and globally under the internal affairs doctrine. Therefore, aligning AI with existing laws, instead of creating separate rules for AI, is suggested. AI should be subject to the same laws as humans.

One approach to ensure AI adheres to legal standards is to integrate law into AI agents. Researchers can train AI systems to understand the spirit of the law by using legal data and processes. Additionally, AI compliance agents can be developed to help organizations automatically follow the law and provide third-party legal oversight.

AI legal compliance can be improved through supervised learning and reinforcement learning, as well as by designing prompting schemes to elicit more consistent and legally compliant responses from language models.

If an AI operates an LLC, it must comply with the law like any other entity, with courts having the authority to issue injunctions or demand damages. Incentives for AI-operated LLCs exist, and embedding the law into AI, along with automated compliance mechanisms, is both possible and desirable.