Racing Toward AGI: Why Legal Systems Must Catch Up With Artificial Intelligence

Artificial Intelligence is evolving faster than most legal systems can respond. What was once a theoretical discussion is now a reality influencing global markets, employment models, and public governance. At M S Sulthan Legal Associates, we believe the law must not lag behind innovation. It must provide the structure that ensures progress remains responsible and inclusive.

As we inch closer to Artificial General Intelligence (AGI)—systems capable of performing across multiple cognitive domains—we are entering uncharted legal territory. The urgency lies not just in regulating AI, but in rethinking foundational legal, economic, and institutional frameworks before disruption outpaces preparedness.

Key Legal Challenges Emerging with AGI

1. Labour and Income Systems

   Current economic systems are built on the assumption that people earn through work. AGI could upend this. If machines take over most skilled tasks, traditional wages may decline or disappear. This raises critical legal questions: How do we structure income when labour is no longer central? Should we consider universal basic income or digital capital redistribution as legal entitlements?

2. Competition and Market Concentration

   The AI ecosystem is consolidating rapidly. Access to compute power, proprietary data, and foundational models is becoming limited to a few dominant players. Traditional antitrust laws may fall short in addressing AI monopolies. New rules must define essential AI infrastructure, regulate access, and prevent anti-competitive vertical integration that could stifle innovation or compromise safety.

3. Institutional Readiness and Policy Gaps

   Governments and regulators often lack technical depth when engaging with frontier technologies. The pace of innovation demands responsive policy-making and cross-disciplinary collaboration. Building institutional expertise is no longer optional—it’s foundational to good governance in the AI age.

4. Global Governance and Coordination

   Unlike nuclear or environmental risks, AI lacks a global regulatory treaty. As AGI development becomes a geopolitical race, countries must agree on safety standards, enforcement norms, and audit mechanisms. Without coordination, fragmented national policies will only increase systemic risks.

5. Intellectual Property and Liability

   Who owns AI-generated content? Who is liable when autonomous systems cause harm? Current IP laws and tort frameworks don’t answer these questions. Clear statutes are needed to define authorship, assign risk, and protect public interest in a world where machines create and decide independently.

What Businesses and Institutions Should Do Now

• Audit internal use of AI and assess risk exposure under current laws
• Revise contracts to include AI-specific terms on IP, liability, and transparency
• Train internal legal, compliance, and operations teams to stay informed
• Engage in regulatory and policy consultations to influence ethical AI deployment

The Way Forward

AGI is no longer science fiction. It is a fast-approaching reality. And with it comes the need for bold legal thinking. Institutions must act with foresight, building adaptive legal frameworks that anticipate the unknown rather than react to disruption after the fact.

At M S Sulthan Legal Associates, we are committed to guiding governments, businesses, and research institutions through this transition with clarity, integrity, and strategic legal insight. As technology changes what’s possible, the law must define what’s responsible.

If your organisation is working with or exposed to AI-driven systems, we invite you to consult with our team on legal compliance, contract design, public policy, and emerging regulatory landscapes.

Contact: contact@mssulthan.com

Keywords: Artificial Intelligence Law, AGI, Legal Policy, Technology Regulation, Competition Law, Labour and AI, AI Risk, Governance, M S Sulthan Legal Associates, Future of Work, Global AI Standards