Written by Christian Rossi
JD Candidate 2024 | UCalgary Law When people think of Artificial Intelligence (AI) taking human jobs, they often picture more data-entry-like roles, which can be done without a human touch. However, this presumption is being challenged by an AI named Mika, who has become the first AI CEO. Mika is a research project created by Hanson Robotics, a Hong Kong-based engineering and robotics company known for developing human-like robots.[1] Mika has been brought on by a Polish company named Dictador, which sells premium aged rum from Colombia.[2] Mika’s purported advantage lies in its ability to swiftly and accurately analyze vast amounts of data, enabling unbiased, data-driven decision-making.[3] The AI can also work 24/7 and is not subject to the same employment standards as a human CEO. The obvious downside of an AI CEO is its lack of emotional intelligence and inability to understand the more intricate wants and needs of humans.[4] Dictador, however, proposes a symbiotic relationship between Mika and a human team to balance and complement each other’s strengths.[5] Hanson Robotics is using Mika to humanize AI.[6] With AI being a relatively new phenomenon, there’s a justified societal concern about the risks of granting excessive power to AI. Placing an AI in a management position allows society to witness firsthand how AI operates and whether it is worth continuing this trend. For Dictador, it appears their primary purpose for making this move is to promote themselves as a forward-looking corporation. While Mika’s role details remain limited, it’s noted that the AI will be a board member and will be responsible for overseeing the Arthouse Spirits DAO project.[7] This DAO, or decentralized autonomous organization, is an exclusive community comprising high-net-worth individuals.[8] To join, one needs to possess a Dictador Non-Fungible Token (NFT). The funds raised from the NFT sales are then put into the DAO Treasury.[9] The DAO Treasury is backed by tangible assets, consisting of over US$50 million of the world’s oldest and rarest rums.[10] Members of the DAO get access to certain benefits such as discounted bottles, exclusive VIP events, masterclasses, having conversations with experts, artists, and blend masters, or they can redeem their tokens for a physical bottle from the Treasury.[11] Mika marks a step towards a new world. Jack Ma, the co-founder of Alibaba Group, predicted that by 2047, a robot CEO will make the cover of Time magazine. However, that prediction may have been too pessimistic.[12] Having an AI CEO raises many practical questions that Dictador will have to consider. For example, what happens to the compensation that would have gone to a CEO? Presumably, part of the compensation that would otherwise go to a CEO will go to the operating and maintenance of the AI system. Still, as the technology advances, the costs of these systems will decrease, leaving additional capital for the corporation. Corporations will need to decide how to best allocate this money—whether it should go to the shareholders or whether the costs, which would typically benefit employees, should still be directed to employees. There’s also the question of who’s responsible if something goes wrong. CEOs owe a fiduciary duty to the corporation. However, is it possible for a corporation to sue an AI CEO? If the AI is at fault, who should be held liable - will it be the corporation, the creator of the AI system, or the employees responsible for overseeing the AI system? Apart from these questions, there is, of course, the broader ethical question of whether society wants AI to take over executive roles in corporations and whether hiring an AI system over a human is fair. All these questions must be addressed before society becomes overly dependent on AI, but Mika will be the first step towards resolving these issues. It’s hard to imagine a world run by AI, but the future seems closer than ever. The story of Mika is one society hasn’t experienced yet, prompting the question: Is anyone’s job [1] Vanya Gautam, “Meet Mika: The World’s First AI Human-Like Robot Hired As CEO” (9 November 2023), online: <https://www.indiatimes.com/worth/news/meet-mika-world-first-ai-human-like-ceo-hired-620076.html> [Gautam]. [2] Jamie Nonis, “Meet Mika, the world’s first AI CEO running a global company” (11 July 2023), online: <https://www.thepeakmagazine.com.sg/interviews/mika-world-first-ai-ceo/>. [3] Ibid. [4] Ibid. [5] Ibid. [6] Gautam, supra note 1. [7] “Dictador announces the first AI human-like robot CEO in a global company” (7 September 2022), online: < https://dictador.com/the-first-robot-ceo-in-a-global-company/>. [8] Ibid. [9] Ibid. [10] Ibid. [11] Ibid. [12] Ibid.
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Written by Amreet Toor
JD Candidate 2025 | UCalgary Law In the excitement of creating a start-up business, it is easy to overlook important steps such as creating a founders’ agreement. While an agreement may not be necessary for all businesses, there are potential scenarios where it may be very detrimental to the long-term success of a business if a proper agreement is not created from the outset. A founders’ agreement, also known as a co-founder agreement, establishes the framework for the relationship between the founders and addresses various aspects of the business, providing clarity, protection, and a shared understanding. This may not seem very important in the beginning when the founders involved have a clear picture of their roles and responsibilities. Still, as the business grows and evolves, expectations and responsibilities may begin to change from what was originally discussed. To address and prevent these potential issues, most founders’ agreements will contain provisions regarding equity distribution, vesting terms and schedules, roles and responsibilities, decision-making procedures, compensation, intellectual property rights, non-competition and non-solicitation, confidentiality, exit strategies, and dispute resolution[1]. Equity distribution provisions clarify the allocations of equity or shares in the company that the founders will be entitled to based on their contributions to the new business. These contributions can be financial, time or in kind. Vesting terms and schedules outline the conditions under which founders become entitled to their allocated equity. This prevents founders from leaving the business with a significant ownership stake earlier than planned or failing to uphold their commitments to the business. A well-planned vesting schedule protects the other founders while encouraging long-term commitment to the business. Zipcar[2] is an excellent example of a company that would have greatly benefitted from a well-planned vesting schedule. Provisions that outline founders’ roles prevent future misunderstandings and conflicts. These provisions are not guaranteed to cover all possibilities and may need to be amended over time as the business grows. Compensation may be tied to these roles and may also need to be adjusted as the business grows, but creating these provisions ahead of time prevents litigation that could arise based solely on verbal agreements. Decision-making provisions outline the decision-making process and specify how major decisions will be made, including what constitutes a quorum to pass decisions. In conjunction with this provision is the dispute resolution process, which works to smoothly handle any disputes that arise and can help to avoid lengthy and costly litigation between founders and the corporation. Intellectual property is one of the most important provisions in a founders’ agreement. It is crucial to designate whether intellectual property is the property of a founder or the corporation. If the intellectual property does not rest with the corporation, a founder may exit the business and effectively shut it down by taking the intellectual property rights with them. They may also choose to hold the business hostage by controlling the intellectual property[3]. Intellectual property is not limited to copyright or patents but can also include trade secrets. Waiting to create a contract that outlines intellectual property rights can result in serious harm, such as a founder stealing the idea and creating a competing venture, as alleged by the Winklevoss twins.[4] This is why confidentiality agreements are also crucial to the long-term success of a business. Confidentiality agreements prevent founders from sharing crucial information about the business outside of a select group of people. In combination with non-compete and non-solicitation provisions, confidentiality agreements protect the corporation’s interests from founders who choose to exit the business. Finally, there is the exit strategy provision. It is an eventuality that founders will need to exit the business to be able to sell the equity they have been allocated, and to reap the rewards of their hard work. A properly planned exit strategy will consider procedures for selling the business, transferring ownership, or handling other exit scenarios. It will vary greatly depending on the organization, but it is important to set out early to avoid conflict and possible litigation. Considering this information, a founders’ agreement can be a powerful tool to protect the interests of both the founders and the corporation. It allows for easier conflict resolution, aligns the interests of all founders, and provides clarity. [1] Raz. “The Importance of Founder Agreements: Key Considerations for Startup Founders.” Falcon Law PC, 4 May 2023, falconlawyers.ca/the-importance-of-founder-agreements-key-considerations-for-startup-founders/. Accessed 29 Oct. 2023. [2] Hellmann, Thomas, and Veikko Thiele. “Contracting among Founders.” Journal of Law, Economics, & Organization, vol. 31, no. 3, 2015, pp. 630. JSTOR, http://www.jstor.org/stable/43774415. Accessed 29 Oct. 2023. [3] Fauri, Khaled El. “What Should a Founders Agreement Include and Why Do You Need One?” Fauri Law, 10 Oct. 2022, www.faurilaw.ca/blog/what-should-a-founders-agreement-include-and-why-do-you-need-one/. Accessed 29 Oct. 2023. [4] Hellmann, Thomas, and Veikko Thiele. “Contracting among Founders.” Journal of Law, Economics, & Organization, vol. 31, no. 3, 2015, pp. 630. JSTOR, http://www.jstor.org/stable/43774415. Accessed 29 Oct. 2023. Written by Michael Cheung
JD Candidate 2024 | UCalgary Law For motivated teenagers, the prospect of venturing into entrepreneurship can be both alluring and daunting. Starting a business at a young age is a journey filled with excitement and promise, but it demands careful planning, unwavering dedication, and a profound sense of purpose. In this guide shared by the BLG Business Venture Clinic, we will elucidate key strategies to assist teenagers in realizing their entrepreneurial aspirations and charting a course towards success. Look Into the MarketAt the heart of any thriving business lies the fundamental task of recognizing unmet needs in the market. This forms the bedrock upon which to develop innovative products or services that address these real-world problems. By addressing these issues, your entrepreneurial endeavour gains a sense of purpose and relevance. This positions your business favourably in the eyes of potential customers and investors, a pivotal step towards building a flourishing enterprise. Passion-Driven Ventures Teenagers can significantly enhance their chances of success by pursuing businesses that align with their genuine passions. Passion serves as a catalyst for acquiring deep knowledge, nurturing creativity, and cultivating the resilience necessary for thriving as an entrepreneur. When you love what you do, obstacles become opportunities rather than impediments, propelling you forward on your entrepreneurial journey. Leverage Free ResourcesIn the age of digital abundance, numerous free or cost-effective resources tailored for young entrepreneurs await exploration. Online courses, startup incubators, and government programs are among the treasures designed to support and nurture your business growth. Take advantage of these resources, as they can provide valuable insights, skills, and connections that are indispensable for your pursuit of entrepreneurial success. Seek MentorshipEntrepreneurship is not a solitary endeavour. Seek out mentorship programs to elevate your business acumen. Experienced mentors, with their wealth of knowledge and insights, offer guidance that transcends textbooks and formal education. Their network can open doors and provide critical perspectives essential for navigating the complexities of entrepreneurship. Online PresenceEstablishing a strong online presence is non-negotiable in today's digital landscape. The foundation of this presence lies in a professional website and active engagement with your audience through social media. Your online presence serves as a virtual storefront, a medium through which you can build trust, expand your reach, and cultivate meaningful connections with your target audience. Credibility and visibility are pivotal. Secure FundingSecuring adequate funding is a crucial step on the path to business success. Explore various avenues, including crowdfunding, grants, or seeking investments from family and friends. Regardless of the source, a meticulously crafted business plan is your most potent tool in attracting potential investors. It showcases your vision, strategy, and the tangible returns they can expect from supporting your venture. Budget Management Sound financial management is the foundation of a prosperous enterprise. Develop a comprehensive budget plan to oversee and allocate resources judiciously. A well-structured budget ensures informed decision-making, preventing the pitfalls of overspending and promoting financial stability. This fiscal acumen is not only essential for the short term but also a critical factor for the long-term viability of your business. Effective Marketing In a competitive marketplace, effective marketing is your guiding light. Establish a strong brand identity, commencing with a compelling logo that leaves a lasting impression. Building brand awareness and distinguishing your business from the competition necessitates strategic marketing campaigns and creative messaging. In today's dynamic landscape, online logo makers and digital marketing strategies can be invaluable assets in this endeavour. The entrepreneurial journey embarked upon during one's teenage years is a formidable yet rewarding odyssey. It hinges on your ability to identify market needs, pursue your passions, leverage available resources, seek mentorship, establish a commanding online presence, secure essential funding, prudently manage your budget, and execute effective marketing strategies. Remember, success in entrepreneurship is not tethered to age but rather to your unwavering determination, innovative spirit, and steadfast commitment to your goals. As a teen entrepreneur, you possess the potential to make a lasting impact on the business world. Embrace this voyage, letting your passion steer you forward. Written by Justin Chia
JD Candidate 2025 | UCalgary Law The emergence of artificial intelligence (AI) across many sectors of society has been a source of excitement and concern, depending on who you ask. From a business standpoint, AI is thought to jumpstart the rise of start-ups developing innovative and creative ideas centring around this exciting technology and, in turn, generating upside in profits. So far, this prospect has not quite materialized to the extent anticipated. The multi-billion-dollar investments in AI are largely confined to a small bubble of start-ups in Silicon Valley.[1] However, prominent Venture capitalists seem more than willing to invest in AI start-ups, meaning a boom in AI start-up investment in the near future is certainly not out of the question.[2] There are several potential barriers to a boom in AI start-up investments, but I will limit this discussion to 2 key sources: 1) greedy tech giants and 2) high costs of entry. One of the more misguided propositions in the start-up space is that competition triggers innovation, leading to profits. This is partly true, but most profits generated by competition and technological innovation, such as AI, go directly to the multi-national, multi-billion-dollar companies with the resources to exploit this technology for profit. Tech giants, such as Google, Apple, Microsoft and Amazon, have gotten significantly richer with advancements in AI and the subsequent hype amongst investors.[3] Efforts by growth companies to crack into the AI space and rake in some of these profits only boost profits for these tech giants who use innovation to create barriers to entry for start-ups. This is not limited to AI but is instead a product of the corporate system. Established companies view new innovations as opportunities to generate profit, which leaves little room for start-ups to join the party. A closely related explanation is the high costs for start-ups in accessing and developing AI technology and the uncertainty amongst investors regarding the viability of AI start-ups. The high costs of developing and maintaining AI are significant barriers to growth for start-ups, especially when investments are flowing through at a consistent rate. Add to this the myriad of legal fees, including the costs associated with incorporation, filing a patent application, financing agreements and employment. Lawyers play an important role in ensuring AI start-ups' immediate and long-term success. Critically, lawyers must help AI start-ups choose and implement a legal structure that reflects present needs and can adapt to future circumstances.[4] Lawyers will also be key in ensuring that a start-up complies with the relevant legislation, as the last thing that a start-up needs is unnecessary litigation and its costs. Another key area that a lawyer can be of use, especially in the context of AI, is ensuring that the start-ups’ intellectual property is adequately protected. Lawyers will help start-ups choose the type of IP most suitable for their invention or idea. In most cases involving technological innovations, a lawyer will assist start-ups in preparing and filing patent applications, which grant inventors exclusive rights to their inventions.[5] In addition to protecting IP, lawyers will help AI start-ups raise capital by ensuring that the minute book and other relevant documents are prepared to comply with the law. Lastly, and maybe most importantly, lawyers will advise AI start-ups on the appropriate exit transaction/strategy. Most tech and AI start-ups with sufficient funding tend to be acquired, as opposed to going public through an IPO, but a lawyer will be in the best position to determine which option is most viable for the company, given the circumstances.[6] Suffice it to say, the AI start-up landscape remains uncertain, though promising in some respects. One thing that is certain, however, is that lawyers will play an integral role in helping AI start-ups navigate this landscape and hopefully thrive amidst the challenges. [1] “Silicon Valley Startups lean into AI boom” (9 September 2023), online: Axios <https://www.axios.com/2023/09/09/startups-ai-venture-capital> . [2] “The big risk behind the AI investment boom” (23 October 2023), online: Axios https://www.axios.com/2023/10/23/venture-capital-ai-risk-investment. [3] “AI gave tech giants a $2.4 trillion boost to their market caps in 2023”(17 October 2023), online: CNBC <https://www.cnbc.com/2023/10/17/amid-ai-buzz-big-us-tech-giants-add-2point5-trillion-in-market-cap.html>. [4] Bryce C Tingle, Start-up and Growth Companies in Canada: A guide to Legal and Business Practice, 3rd ed (Toronto: LexisNexis, 2018) at 4. [5] “Tips for Startups – Intellectual Property and its Value to Your Company” (August 2016), Online: McMillan LLP <https://mcmillan.ca/insights/tips-for-startups-intellectual-property-and-its-value-to-your-company/>. [6] Ibid at 16. |
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