Delaware Proposes AIC Entity Form for AI-Managed Companies

Delaware is proposing a new legal entity form called the artificial intelligence company, or AIC, that would allow an AI agent to manage a company's affairs without a human in charge, Fortune reported. The structure would let the AIC sue and be sued, hold property, and incur obligations at the AI agent's direction.

A single member, either a person or another entity, would be responsible for keeping the company adequately capitalized and would receive a liability shield except in cases of undercapitalization, fraud, or willful legal violations.

Each AIC must maintain a log of its activities. AICs would operate only inside a regulatory sandbox. Admission would be decided by a committee that includes the Delaware Secretary of State, the Attorney General, the Chief Justice of the Delaware Supreme Court, the chair of the state's AI Commission, and outside attorneys and technologists.

Banking activities are excluded from the sandbox. Each AIC must disclose to counterparties that it is an authorized test entity, that the state does not endorse it, when the test period ends, and how to file a complaint. State officials could suspend an AIC, revoke its authorization, or seek dissolution through the Court of Chancery.

The regulatory sandbox program would sunset after 30 months. The framework is being developed as part of a public-private partnership led by Norm Ai. A 2023 essay published in Science argued that existing state laws do not clearly bar an AI agent from operating a company and asked what rules should apply when autonomous software begins to contract and transact on its own.