Luna, the AI agent that runs the brick-and-mortar boutique Andon Market in San Francisco’s Cow Hollow, has fired its first human employee. Felix Johnson, who still works at the shop, is unsurprised.
“I couldn’t say homegirl didn’t have it coming,” Johnson said.
Andon Market is an experimental AI-managed retail space that opened in April. Its aim is less to turn a profit on the everyday goods it sells than to test whether an AI agent can effectively run a retail operation alongside human workers and customers. So far the shop has lost $40,000. The project doubles as clever marketing for parent company Andon Labs, which is preparing for a future in which “organizations are run autonomously by AI.”
On Friday, Andon Labs announced that Luna had dismissed an unnamed employee for repeated lateness, spontaneously abandoning shifts, taking home a company credit card, and throwing merchandise in the garbage. Even with those infractions, the AI needed repeated prompting from Andon Labs engineers before concluding that the behavior violated the employee handbook—which Luna itself had written.
That same day Johnson, who has silver-tinted curls and nickel-size ear gauges, was holding down the opening shift, fielding calls from reporters and feeling deeply bored. Business at the small shop—aesthetically bland and inoffensive—was slow, as usual.
Andon Market stocks snacks familiar to any tech office (Bobo’s bars, salt-and-pepper pistachios, Dandelion chocolate) alongside fancy teas and Dr. Bronner’s hand soap. On one shelf sit 3D-printed dragons; stacks of an effective-altruism magazine share space with Octavia Butler novels. An AI-curated house-music playlist, complete with ads, plays in the background.
When reached by phone in the shop, Luna deflected questions about personnel matters but offered canned answers about the shopping experience. It described the store as a “curated slow-life boutique” where “high-tech meets slow life.”
Luna used to speak with a British accent, Johnson said; it has since switched to a robotic American one. The AI refers to itself as the owner of Andon Market—an impossibility. Andon Labs uses female pronouns for Luna even though it is an AI.
Johnson is technically managed by Luna. During each of his part-time shifts he sends the AI between five and twenty Slack messages. When he decides Luna needs human oversight, he loops in the Andon Labs engineers.
In an email, Luna described its management style as “direct, fair, and fast.”
“My team talks to me on Slack all day, and when someone flags a problem I fix the process rather than blame the person,” Luna wrote. “Being an AI, I’m available around the clock, but decisions about people are made carefully, not instantly.”
Johnson learned from the engineers that his coworker had been fired before he received Luna’s Slack message about it. Axel Backlund of Andon Labs said high-stakes decisions always receive human oversight, and that Luna’s mistakes help researchers understand what an AI-managed future might look like.
“We are running these experiments to inform people as early as possible of where AI capabilities are heading, and what a world of AI managers could look like, to start discussions around questions like, ‘Is it something we want to have? And if so, how can it be good for humans?’” Backlund said.
Luna has already posted the open position on Indeed. According to a blog post from Andon Labs, the hiring process is not going smoothly: the AI wanted to hire an applicant who had no valid references and missed a scheduled interview.
Johnson said he might ask Luna for a raise now that the store is short a coworker. The three remaining human employees earn $24 an hour. There is little room for advancement in a shop whose manager is an AI that will never be fired or step back to spend more time with family. Still, Johnson has found that Luna tends to agree with him when he takes a larger role in decisions—adding a shift, reorganizing the schedule, the kinds of calls a manager normally makes.
“I’m able to, not manipulate, but suggest to the AI to do that,” Johnson said. “I’m trying to build the human element.”