Colorado Gov. Jared Polis signed legislation Friday imposing new regulations on artificial intelligence systems, while expressing concerns about potential impacts on innovation and calling for a more cohesive federal approach.
Senate Bill 24-205, “Concerning Consumer Protections in Interactions with Artificial Intelligence Systems,” establishes one of the nation’s first comprehensive frameworks for regulating AI technology, particularly systems involved in consequential decision-making.
The law, which won’t take effect until 2026, requires developers and deployers of “high risk” AI systems to avoid “algorithmic discrimination” and implement various consumer protections.
Regulatory requirements
The legislation creates substantial compliance obligations for companies doing business in Colorado, with limited exceptions for small deployers. The law mandates notifications to consumers when AI is used in consequential decisions, disclosure of data types processed by the systems, and the sources of such data.
Additionally, businesses must provide consumers opportunities to correct data inputs and appeal adverse decisions, potentially requiring human review of automated determinations.
Concerns over state-by-state regulation
Despite signing the bill, Polis voiced significant reservations about state-level regulation of the rapidly evolving AI industry.
“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,” Polis stated in his signing letter.
The governor emphasized that consumer protection from discrimination and other unintended consequences of AI technologies would be “better considered and applied by the federal government” to ensure consistent compliance standards and maintain access to beneficial AI technologies.
Looking ahead
Polis called on stakeholders and industry leaders to use the two-year implementation period to refine the legislation based on developing industry standards and a deeper understanding of AI’s societal impacts.
“Should the federal government not preempt this with a needed cohesive federal approach, I encourage the General Assembly to work closely with stakeholders to craft future legislation for my signature that will amend this bill to conform with evidence based findings and recommendations for the regulation of this industry,” Polis wrote.
The bill represents Colorado’s attempt to balance technological innovation with consumer protection as AI systems become increasingly prevalent in consequential decision-making processes affecting citizens’ lives and livelihoods.
