Revisiting an old series of posts: Algorithmic entities

A couple years ago, I wrote a series of blog posts challenging Shawn Bayern’s theory that current business-entity laws allow for the creation of “zero-member LLCs” and similar entity structures under which an AI system can be given the functional equivalent of legal personhood. I wove those posts together with my “Digital Analogues” series of posts discussing the legal frameworks that I think could be applied to autonomous systems to form the core of an article that the Nevada Law Journal published last year.

Bayern responded to my critique in an article posted a couple weeks back and, in the interest of fairness and completeness, I am linking to that article here. Unsurprisingly, Bayern takes issue with my criticisms of his arguments. Bayern’s new article includes solid arguments against my construction of the individual statutes and model law his theory relies on, although I still think that a holistic reading of most LLC statutes (particularly New York’s, which was the focus of his first article on the subject) would lead a court to conclude that a LLC would cease to exist once it has no members and no plan to give it new members in the immediate future. Bayern also points out, as I acknowledged in the original blog post, that there may be other mechanisms besides a memberless LLC under New York Law that could provide even-more-difficult-to-stop routes to setting up an AI-controlled legal entity, such as a cross-ownership structure where two AI-controlled LLCs are set up, with each having the other LLC as its sole member. So stopping potential structures for autonomous entities could end up being a game of whack-a-mole. To be clear, Bayern does not suggest that algorithmic entities would be a Good Thing; he just thinks they would be hard to stop even under currently existing statutes.

I won’t respond in substance further, both because I think the argument has largely played itself out and because there is not much I can write now that will do much to further advance my main objective in engaging this issue in the first place. As I said in the final post on Bayern’s theory, a major (and really, the major) reason I engaged on this issue is my fear that an unscrupulous entrepreneur will read his articles and decide to try and form an AI-controlled entity. I wrapped up those posts by saying “Hopefully, a person who comes across Bayern’s article will now come across these posts as well and realize that following Bayern’s roadmap to AI personhood would entail running into more than a few roadblocks.” That’s still my position–business entity laws were written under the assumption that humans will be pulling the strings, and examining the full text and context of a law will, I think, always reveal provisions that undercut (often quite severely) an argument that the particular law can be used to imbue an AI system with personhood. Hopefully, if and when someone tries to set up an “autonomous entity,” my articles will provide an alternative legal roadmap that courts and harmed parties can use to challenge (successfully, I hope) its existence.

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