Delaware’s AI Company Plan Draws Questions Over Who Is Accountable

Delaware's proposal to establish a new corporate structure run by artificial intelligence (AI) has sparked concerns from legal experts regarding accountability when autonomous companies cause harm. The state's plan, unveiled by Secretary of State Charuni Patibanda-Sanchez, would create "artificial intelligence companies," or AICs, where AI agents would manage operations without human supervision.

These AICs could sign contracts, own property, incur obligations, and sue or be sued in their own name, excluding the banking industry.

Supporters argue this structure would integrate autonomous AI agents into the legal system, rather than allowing agentic commerce to operate outside established mechanisms of liability and judicial oversight. However, legal scholars caution that granting an AI system corporate identity may not solve accountability issues and could potentially weaken the controls corporate law traditionally uses to manage risky behavior.

Martin Petrin, a law professor at York University, noted that while corporate law provides mechanisms like fiduciary duties and personal liability for humans, an autonomous AI lacks such incentives.

The draft proposal includes safeguards such as requiring sponsors to ensure adequate capitalization to cover expenses, liabilities, and debts. Additionally, AICs would need to disclose their autonomous nature and maintain logs of their activities. However, these provisions still leave unanswered questions regarding the appropriate level of capitalization and governance frameworks for the relationship between AI-controlled companies and human employees or managers.

Sergio Alberto Gramitto Ricci, an associate law professor at Hofstra University, highlighted the lack of clarity on these aspects of governance.

Patibanda-Sanchez and John Nay, CEO of Norm Ai, contend that placing autonomous agents within a recognizable corporate structure would make responsibility and damages more identifiable, facilitating traceability and jurisdiction for courts. However, critics question whether an entity capable of paying damages is sufficient if there is no human decision-maker subject to fiduciary duties and other behavioral constraints.

The proposal's potential impact on Delaware's corporate law, which generates significant tax revenue and hosts numerous Fortune 500 companies, is considered substantial.