{"id":70462,"date":"2023-10-28T00:59:35","date_gmt":"2023-10-28T04:59:35","guid":{"rendered":"https:\/\/world.edu\/?p=70462"},"modified":"2023-10-28T00:59:35","modified_gmt":"2023-10-28T04:59:35","slug":"ais-could-soon-run-businesses-its-an-opportunity-to-ensure-these-artificial-persons-follow-the-law","status":"publish","type":"post","link":"https:\/\/world.edu\/ais-could-soon-run-businesses-its-an-opportunity-to-ensure-these-artificial-persons-follow-the-law\/","title":{"rendered":"AIs could soon run businesses \u2013 it\u2019s an opportunity to ensure these \u2018artificial persons\u2019 follow the law"},"content":{"rendered":"

\"\"
\nOnly \u201cpersons\u201d can engage with the legal system \u2013 for example, by signing contracts or filing lawsuits. There are\u00a0two main categories of persons<\/a>: humans, termed \u201cnatural persons,\u201d and creations of the law, termed \u201cartificial persons.\u201d These include corporations, nonprofit organizations and\u00a0limited liability companies<\/a>\u00a0(LLCs).<\/p>\n

Up to now, artificial persons have served the purpose of helping humans achieve certain goals. For example, people can pool assets in a corporation and limit their liability vis-\u00e0-vis customers or other persons who interact with the corporation. But a new type of artificial person is poised to enter the scene \u2013 artificial intelligence systems, and they won\u2019t necessarily serve human interests.<\/p>\n

As\u00a0scholars<\/a>\u00a0who study AI and law<\/a>\u00a0we believe that this moment presents a significant challenge to the legal system: how to regulate AI within existing legal frameworks to reduce undesirable behaviors, and how to assign legal responsibility for autonomous actions of AIs.<\/p>\n

One solution is\u00a0teaching AIs to be law-abiding entities<\/a>.<\/p>\n

This is far from a philosophical question. The\u00a0laws governing LLCs in several U.S. states<\/a>\u00a0do not require that humans oversee the operations of an LLC. In fact, in some states it is\u00a0possible to have an LLC with no human owner<\/a>, or \u201cmember\u201d \u2013 for example, in cases where all of the partners have died. Though legislators probably weren\u2019t thinking of AI when they crafted the LLC laws, the possibility for zero-member LLCs opens the door to creating LLCs operated by AIs.<\/p>\n

Many functions inside small and large companies have already been delegated to AI in part, including financial operations,\u00a0human resources<\/a>\u00a0and network management, to name just three. AIs can now perform many tasks as well as humans do. For example, AIs\u00a0can read medical X-rays<\/a>\u00a0and do other medical tasks, and carry out\u00a0tasks that require legal reasoning<\/a>. This process is likely to accelerate due to innovation and economic interests.<\/p>\n

A different kind of person<\/strong><\/h4>\n

Humans have occasionally included nonhuman entities like\u00a0animals<\/a>,\u00a0lakes<\/a>\u00a0and\u00a0rivers<\/a>, as well as\u00a0corporations<\/a>, as legal subjects. Though in some cases these entities can be held liable for their actions, the law only allows humans to fully participate in the legal system.<\/p>\n

One major barrier to full access to the legal system by nonhuman entities has been the\u00a0role of language<\/a>\u00a0as a uniquely human invention and a vital element in the legal system. Language enables humans to understand norms and institutions that constitute the legal framework. But humans are no longer the only entities using human language.<\/p>\n

The\u00a0recent development<\/a>\u00a0of AI\u2019s ability to\u00a0understand human language<\/a>\u00a0unlocks its potential to interact with the legal system. AI has demonstrated proficiency in various legal tasks, such as\u00a0tax law advice<\/a>,\u00a0lobbying<\/a>,\u00a0contract drafting and legal reasoning<\/a>.<\/p>\n

An LLC established in a jurisdiction that allows it to operate without human members could trade in\u00a0digital currencies<\/a>\u00a0settled on\u00a0blockchains<\/a>, allowing the AI running the LLC to operate autonomously and in a decentralized manner that makes it challenging to regulate. Under a legal principle known as the\u00a0internal affairs doctrine<\/a>, even if only one U.S. state allowed AI-operated LLCs, that entity could operate nationwide \u2013 and possibly worldwide. This is because courts look to the law of the state of incorporation for rules governing the internal affairs of a corporate entity.<\/p>\n

We believe the best path forward, therefore, is aligning AI with existing laws, instead of creating a separate set of rules for AI. Additional law can be layered on top for\u00a0artificial agents<\/a>, but AI should be subject to at least all the laws a human is subject to.<\/p>\n

Building the law into AI<\/strong><\/h4>\n

We suggest a research direction of\u00a0integrating law into AI agents<\/a>\u00a0to help\u00a0ensure adherence to legal standards<\/a>. Researchers could train AI systems to\u00a0learn methods for internalizing the spirit of the law<\/a>. The training would use data generated by legal processes and tools of law, including methods of lawmaking, statutory interpretation, contract drafting, applications of legal standards and legal reasoning.<\/p>\n

In addition to embedding law into AI agents, researchers can develop AI compliance agents \u2013 AIs designed to help an organization automatically follow the law. These specialized AI systems would provide third-party legal guardrails.<\/p>\n

Researchers can develop better AI legal compliance by fine-tuning large language models with\u00a0supervised learning<\/a>\u00a0on labeled legal task completions. Another approach is\u00a0reinforcement learning<\/a>, which uses feedback to tell an AI if it\u2019s doing a good or bad job \u2013 in this case, attorneys interacting with language models. And legal experts could design prompting schemes \u2013 ways of interacting with a language model \u2013 to elicit better responses from language models that are more consistent with legal standards.<\/p>\n

Law-abiding (artificial) business owners<\/strong><\/h4>\n

If an LLC were operated by an AI, it would have to obey the law like any other LLC, and courts could order it to pay damages, or stop doing something by issuing an injunction. An AI tasked with operating the LLC and, among other things, maintaining proper business insurance would have an incentive to understand applicable laws and comply. Having minimum business liability insurance policies is a standard requirement that most businesses impose on one another to engage in commercial relationships.<\/p>\n

The incentives to establish AI-operated LLCs are there. Fortunately, we believe it is possible and desirable to do the work to embed the law \u2013 what has until now been human law \u2013 into AI, and AI-powered automated compliance guardrails.<\/p>\n

Author Bios:<\/strong> Daniel Gervais is a Professor of Law at Vanderbilt University and John Nay is a Fellow at CodeX – Stanford Center for Legal Informatics at Stanford University<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Only \u201cpersons\u201d can engage with the legal system \u2013 for example, by signing contracts or filing lawsuits. There are\u00a0two main categories of persons: humans, termed \u201cnatural persons,\u201d and creations of the law, termed \u201cartificial persons.\u201d These include corporations, nonprofit organizations and\u00a0limited liability companies\u00a0(LLCs). Up to now, artificial persons have served the purpose of helping humans […]\n… learn more→<\/a><\/p>","protected":false},"author":33,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[69645],"tags":[434690],"coauthors":[11733],"class_list":["post-70462","post","type-post","status-publish","format-standard","hentry","category-law","tag-artificial-persons"],"acf":[],"yoast_head":"\nAIs could soon run businesses \u2013 it\u2019s an opportunity to ensure these \u2018artificial persons\u2019 follow the law - World leading higher education information and services<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/world.edu\/ais-could-soon-run-businesses-its-an-opportunity-to-ensure-these-artificial-persons-follow-the-law\/\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"og:locale\" content=\"en_US\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"og:type\" content=\"article\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"og:title\" content=\"AIs could soon run businesses \u2013 it\u2019s an opportunity to ensure these \u2018artificial persons\u2019 follow the law - World leading higher education information and services\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"og:description\" content=\"Only \u201cpersons\u201d can engage with the legal system \u2013 for example, by signing contracts or filing lawsuits. 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