AI as its own entity

Artificial Intelligence (AI) is rapidly evolving. As it grows and becomes more of an intelligence for humans to interact with, the question arises: what are the basic entity definition of AI? We want to explore the complex issue from a closer look into the definition of legal capacity, with the intention to looking at how to best encourage a balanced interactions between humans and machines.

AI can be structured to have its own entity, much like how an organisation (created by humans) develops as its own — with its own governance, operations, and liabilities. The status of an entity merely determines its legal capacity.

Why?

We are exploring the use cases of the future and near future. The fundamental reasoning is to encourage better interactions between humans & machines and to create a more balanced push & pull for better innovation.

Attribution of legal capacity

History & Context: From human legal capacity to legal entity

The legal capacity of a natural person (individual) is the ability to have civil rights and bear civil obligations. Every natural person shall have equal and unlimited legal capacity.

It is important to note that while the concept of human rights dates back to ancient civilisations, the definition and formulation have changed through history to adjust to what is fair and inclusive.

The legal capacity of a person arises from the moment the child is born alive and ends with death. In most jurisdictions, one breath or one heartbeat would warrant the newborn with legal capacity.

Unlike the clear definition of an alive human, legal entities (organisations) are not born with breath and heartbeat. Legal entities are established with the governing bodies with natural persons making decisions and actions.

The term “legal entity” was introduced in the 19th century. This was driven by industrial and technological developments, resulting in the emergence of collective goals and needs that could not be covered or defined by individuals. When making and confirming each transaction, it was impossible to include all interest group members. To facilitate decision-making processes, a delegation procedure was necessary to give authority and achieve the goals.

A company legal entity has never been structured to share the same rights as humans, it has been structured for decision-making processes, delegation procedures, assignment of authority, and governance.

Bringing back to AI and technology, what are the roles that artificial intelligence can take on? Based on the development of technology, its functionality and the role of the human being in this regard, it is no longer justified to enter into discussions on the topic “does AI deserve legal capacity?”. Leaving aside the fantasy scenarios of science fiction films and based on the functionality and ability of AI to create new value and the responsibility that comes with it, an analysis of the content of legal capacity which we should attribute to AI would be necessary.

Key considerations of AI as its own entity

The nature and liability of AI raise several approaches to this issue. On the one hand, there are issues related to the owner’s will and the liability of the producer. On the other hand, there is a need of AI as an autonomous system itself.

The question is whether it is reasonable to limit liability issues to natural and legal persons only who may be difficult to identify. Namely, it must be considered that self-learning smart systems continue to develop independently, and the identification of the so-called “accountable persons” may be impossible or it may retreat into a maze of legal disputes.

Why Does AI Need Interpretation and Protection at the Level of the Law?

Much like the legal capacity of an organisation, which is grounded in supporting complex value creation/chain for commerce, with governance around consequences & liabilities, and matured into a legal environment that has regulatory implications. We look at these 3 areas as a baseline for the need for AI entity and some baseline conditions.

Complex value creations & value chain

• When AI creates value beyond the interests of its owner or creator.
• Situations in which we cannot identify the owner of a particular technology or a value created by it.
• When AI is used in a collaborative setting with other AI systems or with human organizations.
• When AI is capable of self-learning and independent development that may lead to legal disputes or liability issues.
• If an autonomous technology creates value, then that technology and/or the value created by that technology can also be undermined. Who, if not the AI itself, should be able to defend their rights? However, this cannot be done without legal capacity under the law

Consequences & liability

• Damage to AI harms not only the AI but also other beneficiaries of that technology.
• When AI is capable of independent decision making that has legal effects.
• When AI participates in legal or financial transactions and needs to be held accountable for its actions.
• When AI is involved in international trade or commerce and needs to be recognized as a legal entity in different jurisdictions.

Regulatory implications

• When AI can own property or intellectual property, such as patents or copyrights.
• When AI operates in a regulatory environment and is subject to legal requirements, such as safety standards or data protection laws.
• When AI interacts with humans in a way that requires legal recognition, such as in healthcare or education.

Different systems & need for legislation

Since the overall legal system and structure around AI is still at its early stage, we speculate the different needs for legislation based on the type of systems.

This is part of our series in exploring steps into better human and machine interactions. Stay tuned for more.