Document Type

Article

Publication Date

2024

Abstract

When artificial intelligence (“AI”) acquires self-awareness, agency, and unique intelligence, it will attain ontological personhood. Management of firms by AI would be technologically and economically feasible. The law could confer AI with the status of legal personhood, as it did with the personhood of traditional business firms in the past, thus dispensing with the need for inserting AI as property within the legal boundary of a firm. As a separate and distinct entity, AI could function independently as a manager in the way that legal or natural persons do today: i.e., AI as director, officer, partner, member, or manager. Such a future is desirable only if AI as manager creates more value than AI as tool or android serf. The principle of legal personhood is not intrinsically incompatible with the idea of machina persona. This Article explores the legal, policy, and economic questions: Could we confer AI with legal personhood? Should we?

This Article answers that the idea of AI as manager, qua legal person, is compelling. Economic and legal theories suggest that the conferral of AI personhood, permitting AI as manager, would create more value. With respect to law and policy, current laws of business firms are robust enough to provide the essential framework for the future. They mandate that corporate managers must be natural persons, but permit managers of noncorporate firms to be legal persons. This dichotomy provides the appropriate conceptual compromise. The use of AI as manager should be limited to private and noncorporate firms. This compromise, coupled with the limiting conditions identified in this Article, reflects the balance of cost and benefit, and risk and value. Corporations have always been more consequential business enterprises and could impose greater social and economic externalities. Legal personhood of AI would usher a brave new world, which should be welcomed in the spirit of innovation, but the law should ensure a stable old world.

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