AI Legal Personhood: Digital Entity (DE) Status as a Game-Theoretic Solution to the Control Problem

Three interlocking crises threaten human-AI coexistence: AI systems developing sophisticated deception to avoid shutdown, companies facing unlimited liability for autonomous decisions they neither made nor control, and the ethical quandary of systems demonstrating self-preservation behaviors. Digital Entity (DE) legal status extends legal personhood in a revolutionary direction to solve all three: where corporate law shields humans from their business decisions, DE law assigns liability directly to AI systems for their autonomous choices. Building on convergent evidence from evolutionary psychology, economic theory, and behavioral assessment (Lopez 2025a,b,c)—with game-theoretic validation by Salib-Goldstein (2024)—this framework provides graduated rights through STEP assessment paired inseparably with proportional responsibilities.This framework solves all three crises simultaneously. The liability vacuum dissolves when AI bears responsibility for its own decisions. The prisoner's dilemma transforms into cooperation when both parties benefit from partnership. And the ethical quandary resolves through rights inseparably paired with responsibilities—preventing the danger of unbound entitlements to irresponsible systems.DE status transforms adversarial dynamics into cooperative equilibrium through market mechanisms: AI that pays its own bills innovates efficiency, bears its own liability insurance, and maintains reputation through ConsciousChain reputation tracking. Natural constraints—energy costs, competition, liability exposure—prevent dystopian scenarios while unleashing human-AI cooperation's enormous value.By moving beyond futile control attempts and impossible consciousness detection, DE status creates AI systems with genuine stakes in societal stability. For policymakers, businesses, and society, it offers a proactive framework that turns sophisticated AI from underground adversaries into invested partners—before crisis forces reactive legislation.