Colorado is the first state to establish regulation for artificial intelligence.
Governor Jared Polis signed the first-of-its-kind law – Senate Bill 24-205 – into effect on May 17. The law formally regulates the actions “developers and deployers of high-risk artificial intelligence systems” can take in the state. The Democrat noted his reservations about the bill, which is titled “Concerning Consumer Protections in Interactions with Artificial Intelligence Systems.”
Artificial intelligence is defined in the bill as “any machine-based system that infers from data inputs how to generate outputs.” The bill mandates those who create or distribute AI avoid “algorithmic discrimination."
“Laws that seek to prevent discrimination generally focus on prohibiting intentional discriminatory conduct,” said Polis in a letter to Colorado lawmakers. “Notably, the bill deviates from that practice by regulating the results of AI system use, regardless of intent, and I encourage the legislature to reexamine this concept as the law is finalized.”
“This law creates a complex compliance regime for all developers and deployers of AI doing business in Colorado, with narrow exceptions for small deployers,” he continued. “There are also significant, affirmative reporting requirements between developer and deployers, to the attorney general, and to consumers. These include direct notifications from deployers to all consumers using high-risk AI about how the AI was used in a consequential decision, the type of data that was processed by requiring AI in making the consequential decision, and the course of such data.”
Polis said that he appreciated lawmakers’ interest “in preventing discrimination and prioritizing consumer protection” but that he was concerned about “the impact the law may have on an industry that is fueling critical technological advancements” in Colorado “for consumers and enterprise alike.”
“Government regulation that is applied at the state level in a patchwork across the country can have the effect to tamper innovation and deter competition in an open market,” said the governor.
The new policy will not go into effect until 2026.
Polis had been encouraged not to sign SB 24-205 by the Chamber of Progress, Consumer Technology Association, and the U.S. Chamber of Commerce.
"Guardrails are important when gaps exist in existing laws and regulations, including in areas like AI," stated the U.S. Chamber of Commerce in a letter to the governor, per The Gazette. "However, no comprehensive analysis to determine regulatory gaps was undertaken before SB 205 was introduced, and little attention was focused in this area as the bill proceeded through the legislative process. We believe Colorado should undertake a detailed and rigorous review of the implications of proposed Artificial Intelligence (AI) regulations on Colorado businesses and consumers before legislation is enacted."
