Sooo the primary way we enforce contracts and laws against people are things like fines and jail time.

How would you apply the threat of those to "little people on a chip", exactly?

Imagine if any time you hired someone there was a risk that they'd try to steal everything they could from your company and then disappear forever with you having no way to hold them to account? You'd probably stop hiring people you didn't already deeply trust!

Strict liability for LLM service providers? Well, that's gonna be a non-starter unless there's a lot of MAJOR issues caused by LLMs (look at how little we care about identity theft and financial fraud currently).