Some sources say he hailed from Handan 邯鄲 (capital of the feudal state of Zhao 趙), where a princess of the feudal state of Qin 秦, the First Emperor's mother, was living in political exile. Lao Ai won her favour and accompanied her young son, when he became king of Qin.
According to another version, he was a retainer of the Counsellor Lü Buwei 呂不韋, to whom he pretended being a eunuch, and was made overseer of the inner quarters of the Empress Dowager. As a minion of the Empress Dowager, Lao Ai had great influence also on political decisions. His own retainers were more than a thousand persons, his household was run by several thousand servants, and he assembled greatest wealth. In 239 BCE Lao Ai was honoured with the title of Marquis of Changxin 長信侯, and thus enjoyed the income of several commanderies.
One day it was discovered that he was not a real eunuch, and had even two children with the Empress Dowager. Accused of high treason, and charged with the attempt to make one his sons emperor, he secretly decided to rise in rebellion. When the young king of Qin (the eventual First Emperor) travelled to Yong 雍, an old seat of government of the Qin dynasty, to perform his capping rites (guanli 冠禮), which would allow him to personally take over rulership, Lao Ai attacked the Qinian Palace 蘄年宮, but Lord Changping 昌平君 and Lord Changwen 昌文君 put down the uprising. Lao Ai was captured and executed, and his family extinguished in three generations.