Delaware's AI-Run Company Plan Draws Federal Oversight Fire

Delaware wants to let AI agents run entire companies, and a congressional committee chairman has responded by threatening federal legislation to stop it. US Rep. James Comer (R-Ky.), who leads the House Committee on Oversight and Government Reform, told Delaware Governor Matt Meyer in a letter that the state's proposal would let human owners evade responsibility for harmful actions taken by their AI.

The letter, sent yesterday, asks Meyer for documents. The committee "seeks assistance obtaining documents related to your state administration's efforts to establish a new form of corporate entity to be known as an Artificial Intelligence Company (AIC)," Comer wrote.

What would an AI Company actually be?

According to a draft bill that may be submitted to the Delaware state legislature, an AIC "may have any lawful purpose, regardless of whether for profit, except for the business of banking." AI agents could be "designated to manage the business and affairs, and to conduct the business, of the AIC."

The bill proposes a 30-month "regulatory sandbox" to test the concept. Delaware expects the new entity type to add revenue through taxes and fees, which matters to a state that already hosts a outsized share of American corporate life.

About two-thirds of Fortune 500 companies are incorporated in Delaware, drawn by low corporate taxes and a business-friendly legal framework. Secretary of State Charuni Patibanda-Sanchez claims Delaware offers "the most predictable and business-focused legal home in the world," and 334,461 new entities were formed there in 2025.

How the liability shield works

Under the draft law, a human or corporate "member" funds the AIC and collects any profits, while an AI agent runs the actual business. The bill states plainly: "The member is not liable for any act or omission that the AIC takes or fails to take, or that another person takes or fails to take at the direction of the AIC."

The exceptions are narrow. Liability attaches when a member uses the company "to engage in fraud or any willful violation of law," or allowed the AIC to conduct business the member knew was outside its stated purpose.

Comer read the structure and reached a blunt conclusion. The proposal, he wrote, could "be used to protect powerful AI companies and their investors from responsibility for reckless harmful actions, while also protecting non-transparent forces seeking anticompetitive regulatory capture behind state AI initiatives." He also suggested the probe would "inform possible federal legislative efforts including proposals to appropriately limit state AI regulatory initiatives."

"Wrap AI in legal form"

Patibanda-Sanchez co-wrote a Fortune op-ed in July 2026 announcing the plan with John Nay, founder and CEO of Norm Ai, a private company that builds legal AI agents. Their argument rests on inevitability.

"Nothing in the law of several states clearly prevents an AI agent from operating a company with no human at the helm," they wrote. Prohibition would fail, they argued, because technology firms "are likely to push the boundaries of the law." The alternative: "The answer is to wrap AI in legal form. Give an autonomous system a recognizable legal identity and you make it legible to law. You create a defined target to which responsibility and damages can attach."

The AIC could sue and be sued in its own name, hold property, and incur obligations, while keeping a log of its activities. The op-ed said the sandbox would "pilot agentic commerce in daylight, under supervision, with capital tied to liability and the ability to shut a system down."

Academic reviewers are unconvinced. UC Berkeley law professor Andrew Baker told the Financial Times the plan looks like "an overly generous liability shield, which seems unwarranted without some underlying policy rationale that hasn't been developed or justified well." York University's Martin Petrin told Bloomberg that "other states will likely move ahead with similar proposals to compete in this area," and warned of "a regulatory race to the bottom" absent a federal framework.

A Mark Cuban exchange started it

The idea has a traceable origin. In April 2026, Mark Cuban posted on social media that any governor seeking revenue should let people "incorporate using an AI agent and stablecoins" and charge a premium, because "first to market makes a killing." Meyer's official account replied with one word: "On it!"

Meyer, a Democrat, had already signed a legislative resolution in July 2025 creating a sandbox framework for "agentic artificial intelligence." That resolution produced the Delaware Artificial Intelligence Commission's Sandbox Subcommittee, which has been drafting the framework. Its December 2025 annual report noted the subcommittee received a briefing from Patibanda-Sanchez on her working group's structure for the sandbox.

What can an AIC actually do?

Principal drafter John Mark Zeberkiewicz, a corporate attorney at Wilmington's Richards Layton and Finger, told Spotlight Delaware in June 2026 that the bill could let AI agents provide coding services, sign contracts, and even file and defend lawsuits. "Anything that a company can do, the AIC can do as a company," he said.

Patibanda-Sanchez put the fiscal case directly at a June 2026 commission meeting. "Should a new entity form be created out of it, that's really a huge benefit to our state's revenues," she was quoted as saying.

A spokesperson for Meyer said the office has "received the letter and are in the process of reviewing it." A spokesperson for Patibanda-Sanchez declined comment and referred questions to the governor's office.

The bill may reach the Delaware legislature next year. Whether it survives contact with a hostile congressional committee, and possibly federal preemption, is now the operative question.