This Article argues that algorithmic entities—legal entities that have no human controllers—greatly exacerbate the threat of artificial intelligence.

Algorithmic entities are likely to prosper first and most in criminal, terrorist, and other anti-social activities because that is where they have their greatest comparative advantage over human-controlled entities. Control of legal entities will contribute to the threat algorithms pose by providing them with identities. Those identities will enable them to conceal their algorithmic natures while they participate in commerce, accumulate wealth, and carry out anti-social activities.

https://openscholarship.wustl.edu/cgi/viewcontent.cgi?article=6319&context=law_lawreview

Four aspects of corporate law make the human race vulnerable to the threat of algorithmic entities. First, algorithms can lawfully have exclusive control of not just American LLC’s but also a large majority of the entity forms in most countries. Second, entities can change regulatory regimes quickly and easily through migration. Third, governments— particularly in the United States—lack the ability to determine who controls the entities they charter and so cannot determine which have non-human controllers. Lastly, corporate charter competition, combined with ease of entity migration, makes it virtually impossible for any government to regulate algorithmic control of entities.

In 1993, Yale law professor Roberta Romano characterized state government competition to sell corporate charters as the “genius of American corporate law.”2 Although that view is not without detractors,3 it is dominant in academia.4 In recent years, not even the competition’s harshest critics call for its end.5 Despite a recent corporate governance scandal and a financial crisis largely attributed to failures in corporate law, the U.S. government has allowed the competition to continue unabated.