AI-Run Company Gamble Tests the Limits of Delaware Corporate Law - Bloomberg Law News

Ah, Delaware — the state that gave us the legal chassis for every dodgy corporate structure since the 19th century — now wants to birth a new entity: the 'artificial intelligence company.' The proposal, complete with funding minimums and asset ownership requirements, essentially asks: what if we treat AI like a limited liability corporation, but with a 30-month sandbox phase so it can test the boundaries before anyone has to answer for its actions? It's the regulatory equivalent of letting a toddler drive a car in a closed parking lot, then declaring the experiment a success if no one dies.

The sandbox phase is particularly rich. For 30 months, AI companies can operate under a special legal umbrella, presumably free from the pesky constraints of existing liability law. Because nothing could possibly go wrong when you give a nascent, hallucinating, black-box technology a limited-liability shield and tell it to 'innovate.' One imagines the boardroom presentations: 'We're legally an AI company! We don't even know how we make decisions, but that's fine — Delaware said so.' The funding minimums are there to ensure that when the inevitable disaster occurs, there's enough capital to hire top-tier lawyers.

And what of governance? The proposal raises 'questions about AI capabilities and governance,' as the article puts it — which is a polite way of saying no one has a clue how to supervise an entity that can write its own code faster than any human can read it. Delaware's experiment is a microcosm of the entire AI policy landscape: create a legal fiction, cross fingers, and hope the 30-month clock runs out before the catastrophe does. Pass the liability. Cheers.