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A top congressional Republican is demanding information on Delaware’s plan to create a new legal corporate entity for companies run by artificial intelligence agents, saying he’s concerned that the proposal could shield powerful bad actors from legal liability.
U.S. Rep. James Comer, R-Ky., the chair of the House Committee on Oversight and Government Reform, has asked Delaware Gov. Matt Meyer’s administration for documents regarding its proposed Artificial Intelligence Company initiative. The letter could signal that Congress may be exploring limiting state AI regulatory initiatives.
“We are concerned that Delaware’s [Artificial Intelligence Company] proposal could be used to protect powerful AI companies and their investors from responsibility for reckless harmful actions,” Comer said in the letter.
Meyer’s deputy press secretary said his office is reviewing the letter.
Secretary of State Charuni Patibanda-Sanchez and Norm AI founder and CEO John Nay announced the AIC proposal, along with their public private partnership, inFortune magazine in July. Norm AI encodes law and regulation into AI systems.
WHYY News detailed the AIC proposalin September, amid reports about agents going rogue. It included skeptics who questioned whether the proposed AIC companies served any purpose beyond insulating tech executives from negative legal consequences.
Delaware’s AI agent-run companies idea explained
John Mark Zeberkiewicz, a lawyer at Delaware-based firm Richards, Layton, & Finger, has drafted potentially first-in-the-nation legislation that would create companies run by an artificial intelligence agent instead of a person. State lawmakers are expected to consider the initiative next year.
The AI agent would enjoy a type of legal personhood, able to own assets, file lawsuits and act as a liability shield for its owner or parent company.
It would have a single member, a person or an entity responsible for keeping the AIC adequately capitalized. The AI agent must keep a log of its activities. That member would face no liability for the company’s debts unless it failed to make sure it had enough capital or used the company to break the law or commit fraud.
Under the draft legislation, the AIC “may have any lawful purpose, regardless of whether for profit, except for the business of banking.”
If passed, organizations in the state would have 30 months to apply to enter the regulatory sandbox to experiment with AI-run companies. The bill creates a sandbox committee and administrator.
In a statement, the Richards, Layton & Finger law firm said that practicing attorneys have always helped develop legislation related to the state’s corporate and alternative entity statutes.
“The General Assembly makes decisions with the benefit of that input,” the statement said. “Richards Layton & Finger lawyers have proudly participated in that work for generations and continue to do so.”
Delaware’s plan has drawn praise, skepticism
Corporate law professors told WHYY News last month that they questioned whether the state has sufficiently addressed who would be accountable if an AI-run company causes harm.
“There’s really no overarching regulatory plan here for dealing with the fallout that AI-governed companies could bring,” said Christopher Bruner, Stembler Family Distinguished Professor in business law at the University of Georgia School of Law. “I think this raises reasonable questions about whether it makes sense to push ahead with something like this.”
University of Pennsylvania law professorDavid Hoffman commented toBloomberg Law in July that the idea “seems like a solution in search of a problem,” and voiced concern about “outsourcing liability.”
However, Lawrence Cunningham, director of the University of Delaware’s John L. Weinberg Center for Corporate Governance, said in September that Delaware will benefit by being on the cutting edge of creating AI-run companies.
“Delaware is the No. 1 place where people form [limited liability companies], when they’re thinking about forming a business and the No. 1 place where larger companies are incorporated,” he said. “So Delaware, in my view, would be irresponsible to ignore this.”
Meyer administration has declined to answer questions about the proposal
The Comer letter highlighted the lack of transparency of the public-private partnership Delaware has entered into with Norm AI by citing WHYY News’ September article. Patibanda-Sanchez declined to answer a list of questions for that story, which sought more information on the relationship between Norm AI and the Meyer administration.
“While Delaware officials tout the benefits of an AIC regulatory framework for creating transparency around the decision making of an agentic AI, such transparency does not appear to exist in this policy making initiative that may soon result in new state law,” Comer’s letter stated.
Nay did not respond to a request for comment. A spokesperson for Patibanda-Sanchez directed questions to Meyer’s office.
Comer also expressed concern that the proposal could result in “regulatory capture,” where hidden interests could use state AI rules to lock out competitors.
The oversight committee is requesting documents and communications about the AIC plan dating back to Jan. 1, 2025. That includes conversations with consultants who participated in policy development, as well as “internal AI chat logs.”
The deadline for Delaware to respond is Nov. 9.
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