This paper will argue that recent developments in AI technology and its role in digital capitalism threaten the rule of law. AI (or the companies who control it) promotes and monetizes free speech, political competition, and other aspects of democracy, while our societies have been shifting towards a “rule of code,” i.e., a system in which source code is able to put meaningful restraints not only on any individuals and institutions within a society, but also on law and the State. Based on Lawrence Lessig’s “Code is Law,” this paper will draw a more elaborated picture of “regulating AI” according to which AI is not only something that is to be regulated but also something that actively regulates individual and institutional behavior. From this background, it will be argued that, given the interdependence of governments and big tech corporations, free and open societies need to regain control over source code and the critical digital infrastructure to avoid being regulated by private companies that develop, control, and promote AI.
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