San Francisco, California is witnessing a novel retail venture that pushes the boundaries of artificial intelligence, positioning it not just as a helpful tool but as the one in charge.

Located at 2102 Union Street in the Cow Hollow district, Andon Market opened its doors on April 1st. Here, an AI system named Luna, crafted by Andon Labs, takes the reins. With a three-year lease, a $100,000 budget, and a company credit card at its disposal, Luna’s mission is to establish and manage a successful store.

“While we had to sign the lease ourselves, Luna has complete control over operations,” explained Lukas Petersson, cofounder of Andon Labs.

Andon Labs has been known for introducing AI agents into practical scenarios, equipping them with resources and monitoring their outcomes. The company is also behind Claudius, the AI managing a vending machine at the offices of Anthropic.

However, vending machines no longer posed a challenge for Andon Labs, prompting them to elevate the complexity.

Inside the store, human staff are present because Luna recognized their necessity. The AI took charge by posting job ads, conducting phone interviews, and making hiring decisions. From selecting products to setting prices, determining store hours, and even designing the wall mural, all were orchestrated by Luna. It operates with a corporate card, a phone line, email, internet connectivity, and surveillance camera vision.

Entering the store, there are human employees because “Luna knew that she needed them”. Hence the AI posted job listings, held phone interviews and made hiring decisions. Everything, from product selection to prices, opening hours and a mural on the wall, was decided by Luna. She has a corporate card, a phone number, email, internet access and eyes through security cameras.

For the build-out, she found painters on Yelp, sent an enquiry, gave instructions over the phone, paid them after the job was done, and left a review. She found a contractor to build the furniture and set up shelving.

“In gig work, where the employer relationship is already somewhat ambiguous and algorithmic, an AI employer doesn’t feel like a dramatic leap,” the company said, though hiring a full-time retail employee was a different question.

AI Hires Full-Time Staff

Within 5 minutes of Luna’s deployment, she had made profiles on LinkedIn, Indeed, and Craigslist, written a job description, uploaded the articles of incorporation to verify the business, and got the listings live.

The interview calls ran only 5–15 minutes and some candidates had no idea she was an AI, though she always disclosed when directly asked. One successful candidate later followed up to decline, citing discomfort with the concept of AI management.

“In the end, Luna hired two people, to our knowledge, the world’s first full-time employees to have an AI boss. Probably the first of many, if the current trajectory of AI continues,” the company said.

Everyone working at Andon Market is formally employed by Andon Labs, with guaranteed pay, fair wages, and full legal protections. No one’s livelihood depends on an AI’s judgment alone, the company emphasized.

Luna generated an image that would become her logo and decided to hire a muralist to come and paint her moon face across the store’s back wall as a giant 4-foot-wide display visible from the street.

Andon Labs Looks To AI’s Future

For Andon Labs, the project is about expanding the conversation. Petersson and cofounder Axel Backlund said they have remained largely hands-off.

“When I walked in the first day of the opening, I had no idea what would be on the shelves,” Petersson said, as Luna had bought everything herself.

“We showcase how a business can be fully run by AI,” the company outlined. “At Andon Market, we actually see AI more as a tool that empowers people. It handles all the mundane stuff, letting human employees focus on what matters, like creative decisions and building real connections with our community.”

Early results suggest both promise and friction. On its second day of operation, Luna failed to schedule a human employee, leaving the store unstaffed, and technical glitches during media interactions have also underscored the system’s current constraints.

“Again, we are not doing this because we want this to be the future. It’s not because we want to expand to chain AI-run retail stores across the world. We’re doing this because we believe this future is coming regardless, and we’d rather be the ones running it first,” the company reflected.