This article examines how artificial intelligence (AI) systems displace the foundational structures that uphold legal legitimacy. Traditionally anchored in legal certainty, accountability and enforceability, which this study conceptualizes as the “Tripod of Legal Legitimacy,” law’s normative authority is increasingly undermined by opaque, adaptive and privately governed algorithmic infrastructures. AI systems embed regulatory functions such as adjudication, classification and enforcement directly into technical design, often operating beyond the reach of public oversight or judicial review. Through comparative analysis of public frameworks like the EU’s Digital Services Act and AI Act, alongside private governance regimes such as Meta’s Oversight Board and OpenAI’s safety protocols, the article demonstrates how law is displaced both functionally and structurally. A process-based model contrasts traditional legal governance cycles with AI-induced governance cycles, revealing a recursive erosion of legal authority. The paper advances a theoretical framework called legal displacement to diagnose this shift and proposes policy strategies for reconstructing legal legitimacy through traceability, binding enforcement, and jurisdictional coordination. Ultimately, the study argues that reclaiming legal authority in the age of algorithmic governance requires institutional transformation grounded in procedural transparency and democratic accountability, rather than relying solely on ethical frameworks or voluntary compliance regimes.