Colorado made headlines in 2024 by passing the nation’s first comprehensive state law regulating artificial intelligence. The Artificial Intelligence Act set out to protect consumers from the risks of high-powered AI systems, especially in sensitive areas like employment, housing, finance, and healthcare. But as the ink dried, concerns quickly surfaced: Was the law too broad? Would it stifle innovation? Could businesses realistically comply?
Fast forward to early 2025, and the Colorado Legislature found itself at a crossroads. Lawmakers introduced Senate Bill 25-318, a proposed amendment designed to address the tech industry’s worries and clarify some of the Act’s more burdensome requirements. The bill offered several key changes:
- Exempting certain developers, especially those offering open model weights under specific conditions
- Carving out exemptions for particular technologies
- Removing the duty for developers and deployers to use reasonable care to prevent algorithmic discrimination, and the requirement to notify the state attorney general of such risks
- Easing disclosure requirements for developers meeting certain financial and operational criteria
Despite these efforts, the amendment was voted down by the Senate Business, Labor, and Technology Committee. The message was clear: Colorado’s lawmakers are standing firm on their commitment to robust AI regulation.
What Does This Mean for Businesses and Developers?
With the amendment off the table, the original Artificial Intelligence Act remains unchanged. The next step is for the Colorado Attorney General to issue rules and guidance, but the compliance deadline of February 1, 2026, is fast approaching. Here’s what businesses and developers should do now:
- Review the Law’s Requirements: Understand which AI systems are considered “high-risk” and what obligations apply to your organization.
- Assess Your AI Systems: Conduct a thorough audit to identify potential compliance gaps, especially regarding algorithmic discrimination and consumer protection.
- Prepare Documentation: Ensure you have the necessary records and disclosures ready, as required by the Act.
- Stay Informed: Watch for updates and guidance from the Colorado Attorney General’s office, which may clarify compliance expectations.
Actionable Takeaways
- Start compliance planning early to avoid last-minute surprises.
- Engage legal and technical experts to interpret the law’s impact on your operations.
- Communicate with stakeholders about upcoming changes and responsibilities.
Summary of Key Points
- Colorado’s AI Act remains in effect after the failure of SB25-318.
- The law imposes strict requirements on high-risk AI systems in sectors like employment, housing, finance, and healthcare.
- Businesses must prepare for compliance by February 1, 2026.
- The Colorado Attorney General will provide further guidance.
- Early preparation and expert advice are crucial for smooth compliance.