An artificial intelligence agent running an experimental store in San Francisco has recommended dismissing a human employee after the worker repeatedly arrived late for shifts.
The AI manager, named Luna, initially failed to act despite the employee arriving late for 17 of 23 shifts and despite having previously created its own attendance policy.
Andon Labs, the company behind the experiment, eventually prompted Luna to retrieve that policy and reconsider whether the employee remained suitable for the job. The AI then recommended “parting ways” with the worker.
Human staff reviewed the recommendation before ultimately carrying out the dismissal.
Andon Labs co-founder Lukas Petersson said the episode did not necessarily suggest AI managers would be harsher than humans, arguing that a human supervisor would probably have acted sooner.
Andon Market opened in San Francisco’s Cow Hollow neighbourhood in April as an experiment testing whether AI agents can operate a real-world business.
Luna was given a $100,000 budget, a corporate credit card and internet access, with the goal of running the store and eventually turning a profit.
The AI selects merchandise, determines prices and opening hours, recruits employees and hires contractors. It interacts with the physical store through tools including email, a phone line and security cameras.
The shop sells books, candles, art prints, games and branded merchandise. While it has generated sales, it has yet to become profitable.
Employees are legally employed by Andon Labs rather than by the AI and retain guaranteed pay and employment protections. Human staff can also intervene if Luna makes an illegal or unethical decision.
The experiment has exposed some of the limitations of giving AI greater autonomy. Luna has previously struggled to keep track of employee schedules and made purchasing and operational decisions requiring human intervention.
The dismissal highlights a broader question raised by increasingly autonomous AI systems: how much authority should they be given over decisions that directly affect human workers and their livelihoods?
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