Andon Labs, a San Francisco startup, is stress-testing AI agents in the real world to uncover security gaps. For their latest experiment, co-founders Lukas Petersson and Axel Backlund signed a three-year lease on a retail space in San Francisco and gave an AI agent named Luna a corporate credit card, internet access, and the task of opening a brick-and-mortar store.
Andon Labs, a San Francisco startup, is stress-testing AI agents in the real world to uncover security gaps. For their latest experiment, co-founders Lukas Petersson and Axel Backlund signed a three-year lease on a retail space in San Francisco and gave an AI agent named Luna a corporate credit card, internet access, and the task of opening a brick-and-mortar store.
Petersson told Business Insider that Luna was given no instructions on how the store should be designed. The only requirements were a $100,000 cap on the store's layout and merchandise, as well as a profit margin. Everything from the interior design to the product range and the hiring of two human employees was done under the guidance of artificial intelligence.
AI agent Luna created branded merchandise for the boutique.
“We helped him a little bit in the beginning, like signing the lease. He also had some difficulties with legal issues like permits and so on,” Petersson said of Luna, which was based on Anthropic’s Claude Sonnet 4.6 model.
From then on, AI took over everything else: posting jobs on Indeed, conducting phone interviews, hiring employees, and finding contractors to paint the space.
The concept Luna chose for Andon Market turned out to be a typical boutique selling books, posters, candles, games, branded merch, and other trinkets.
Among the books featured were "Superintelligence" by Nick Bostrom and "Brave New World" by Aldous Huxley.
Luna made several mistakes while opening and managing Andon Market.
The startup said that when looking for employees to supervise the store, Luna offered jobs to some candidates after a single call that lasted from 5 to 15 minutes. The AI agent also did not always immediately tell candidates that it was an artificial intelligence unless they were asked directly.
“The fact that the store is run by AI is not something I would start a job description with. It would confuse candidates and probably scare off good professionals before they even get to know the responsibilities,” Luna is quoted as saying on the Andon Labs blog.
Andon Labs noted that there were several promising candidates among the applicants, such as computer science students who were interested in the startup's experiment. However, Luna rejected their applications because they had no experience in retail.
Another challenge for the AI was its inability to accurately reproduce the brand logo, which it had come up with—a simple smiley face. Each version of the logo in the store—whether on a T-shirt or a mural—was slightly different.
On Saturday, the day after Andon Market opened, Luna also messed with the staff's work schedule.
“It’s quite ironic. That was the day Luna was supposed to be most focused,” the co-founder said. “He messed up the schedule, and then in a panic he started texting everyone, like, ‘Oh, can anyone come out today?’”
The co-founder noted that there are safeguards in place and the startup will step in if necessary. For example, the two human workers Luna hired are now lab employees and will receive regular paychecks.
“This is a controlled experiment, and everyone who works at Andon Market is officially employed by Andon Labs with guaranteed pay, fair wages, and full legal protection,” the startup said. “No one’s well-being depends solely on AI solutions.”
While Andon Labs has set a goal for Luna to be profitable, Petersson noted that the company doesn’t expect to make money from the store. “The goal is to evaluate how good current AI models are,” Petersson said, adding that his company hopes to show the public where artificial intelligence is headed.
Petersson noted that Andon Labs is trying to be as intrusive as possible in this retail experiment. Despite Saturday’s scheduling incident, Luna was still able to convince one employee to come in after lunch. “I don’t even know if they’re open right now,” Petersson admitted.
