Plan for AI-run companies challenged by US lawmakers

Plans to allow US companies run entirely by AI “agents” have come under fire from powerful Republicans in Congress, who fear they will shield business owners from liability and could harm consumers.

The proposal made by the state of Delaware would allow the establishment of corporate entities that are run on a day-to-day basis by autonomous AI bots, which would have the right to sign contracts, file lawsuits and make decisions on behalf of the business.

So-called Artificial Intelligence Companies (AICs) would operate within a “regulatory sandbox” for a 30-month pilot period, according to the plans.

James Comer, the Republican chair of the powerful House oversight committee, on Monday wrote to Delaware governor Matt Meyer, a Democrat, requesting documents and information about the state’s plans by November 9.

“We are concerned that Delaware’s AIC proposal could be used to protect powerful AI companies and their investors from responsibility for reckless harmful actions,” Comer wrote in a letter seen by the FT.

He added that the oversight committee was also worried AICs would protect “non-transparent forces seeking anti-competitive regulatory capture”. Comer also expressed concern that John Mark Zeberkiewicz, a corporate lawyer who has represented Facebook, appeared to be a “principal drafter of the proposed legislation”.

Delaware’s proposal, which is likely to be introduced in the state’s next legislative session in January, comes amid numerous reports of AI agents going rogue and hacking entities including Australia’s healthcare system.

Companies are already facing lawsuits over actions taken by their AI systems, and the latest incidents raise the prospect of larger legal and insurance claims based on damage caused by models acting outside human supervision.

Supporters of Delaware’s plan have said US states should establish corporate structures designed around AI before offshore alternatives get traction.

The project has been developed by secretary of state Charuni Patibanda-Sanchez, who is in charge of business registrations. Delaware dominates incorporation for companies and partnerships in the US, with the related fees underpinning a large portion of the state’s budget.

However, several major tech companies like Tesla, Dell and Dropbox have moved their domiciles to the likes of Nevada and Texas, which make shareholder lawsuits harder to bring and win.

The secretary of state’s office has been working on the AIC proposal with Norm AI, an AI-centric legal practice whose founders are former partners at large US law firms.

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In an opinion piece in July, Patibanda-Sanchez and NormAI’s founder said that the legislation would allow Delaware 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,” they wrote. “The only open question is where it finds a home.”

The idea of AI-run companies has been backed by some investors, including billionaire Mark Cuban. In a social media post in April he wrote that a “governor of a state looking to grow their revenues”, ought to look at allowing “anyone to incorporate using an AI agent and stablecoins”.

“First to market makes a killing,” Cuban, an investor in AI start-ups, added.

Under the draft legislation, the AI-run companies would, like existing corporations, shield individuals from personal liability if the AIC is adequately capitalised and its activities logged.

The AI agents would be banned from banking activities. No particular types of businesses have yet been determined to be good candidates to be AICs.

Andrew Baker, a professor of law at the University of California, said the Delaware legislation could be a good faith effort to create “legal certainty” for proliferating use of agentic AI, though he remained sceptical.

“Ultimately the most likely outcome appears to be an overly generous liability shield which seems unwarranted without some underlying policy rationale that hasn’t been developed or justified well,” Baker said.