AI Agents Are Taking Over Contract Negotiations

Some of the world’s largest companies with the biggest supply chains—including Walmart, the global shipping giant Maersk, and the telecom servicer Vodafone—are now using bots powered by artificial intelligence to negotiate and maintain supplier contracts.

That these sophisticated AI systems were designed and built by a startup in Estonia is interesting; it’s even more notable that bots now routinely engage in automated contract negotiations for sprawling global enterprises. But what’s really eye-opening is that these AI agents aim to work autonomously. Which prompts a question: What will happen if the AIs start to haggle amongst themselves?

“In the future I can imagine all sorts of agents in the real physical world negotiating with one another,” says Tim Baarslag, a senior researcher in intelligent and autonomous systems at the Centrum Wiskunde & Informatica in Amsterdam. “Letting these bots run completely wild, I think, requires more research.”

Baarslag has wrestled with negotiation bot concepts for years (one of his peers has a running project called Pocket Negotiator). In 2017 he and his colleagues published “When Will Negotiation Agents Be Able to Represent Us?” They drew a sharp line between automated and autonomous negotiation. The difference is the freedom to negotiate independently.

The five-year-old Estonian startup Pactum is clearly marketing its bot as an autonomous agent. In addition to Maersk and Walmart, its client list now includes a wire and cable supplier and an electrical supply wholesaler (once part of Westinghouse). The startup landed a US $20 million venture capital investment in July from backers including Maersk itself.

How Autonomous Negotiation Works

In a stylish office in the Estonian capital, Tallinn, Kristjan Korjus is working in his stocking feet while a colleague does chin-ups on a bar in the corner near the whiteboards. Korjus is part of the team that started Pactum, along with his brother Kaspar, former director of the country’s e-residency program. Another founding member is Pactum chief executive Martin Rand, who is part of the “Skype Mafia“ of business founders branching out from Estonia’s original software hit. Pactum now also keeps offices in California.

Kristjan—who penned the breezy Bedside Reading About Mathematics, a best-seller in Estonia—used to head AI at Starship Technologies, which makes autonomous delivery robots. He helped Pactum power up a live platform within a month of the company’s founding in 2019. Soon afterward Walmart reps were in the very small Estonian town of Viljandi to work with Cleveron (another maker of parcel delivery robots) and took meetings with promising partners—including the Pactum team and its negotiation AI. “They understood it instantly,” Korjus says.

Pactum calls its agent an autonomous negotiation suite. The system’s machine learning can analyze a massive set of complex contractual terms using historical and market data from both…