On May 17, Colorado’s governor signed the nation’s first artificial intelligence law designed to prevent algorithmic discrimination. The law is slated to go into effect on February 1, 2026.
The Colorado Artificial Intelligence Act (“CAIA”) requires companies that develop and use “high-risk” AI systems to use reasonable care to protect consumers from algorithmic discrimination. Supporters of the legislation state the CAIA is needed to protect against discriminatory biases that may be inherent in certain AI technologies. Here are some key provisions of the law:
- The law impacts “high risk” AI systems. According to the law, a “high-risk” AI system is one that makes, or is a substantial factor in making, a decision regarding a financial or lending service, insurance, housing, employment, education enrollment, health care, government services, or legal services.
- Applies to users and developers. Notably, the CAIA applies to companies that use AI technologies as well as those that develop it.
- Reasonable care requirement. The CAIA will require companies to use “reasonable care” to protect consumers from “any known or reasonably foreseeable risks of algorithmic discrimination.”
- Notice requirements. The law requires that companies report any discovery of algorithmic discrimination to the state attorney general. In addition, developers of high-risk artificial intelligence systems must disclose to the Colorado attorney general and to all known deployers or other developers of the high-risk AI system any known or reasonably foreseeable risks of algorithmic discrimination arising from the intended uses of the high-risk artificial intelligence system.
- Risk management policies. Any company that uses a high-risk AI system must implement a risk management policy to govern the deployment of high-risk AI systems. In addition, companies will be required to mitigate known or reasonably foreseeable risks of algorithmic discrimination.
Despite signing this legislation into law, Governor Polis released a signing statement expressing reservations with the bill. Polis noted that while the law generally focuses on prohibiting intentional discriminatory conduct, it “deviates from that practice by regulating the results of AI system use, regardless of intent.” Polis encouraged the legislature to reexamine this law before it is finalized and takes effect in 2026.
Putting It Into Practice: Our sister blog, AI Law and Policy, first mentioned the Colorado law back in April. The CAIA is the first state attempt to impose risk-based regulations on the use of AI. While President Biden has released an executive order on AI, the government has yet to enact any comprehensive federal legislation. That said, Congress is currently considering several proposals to regulate AI technologies, including a policy “road map” proposed last week by a bipartisan group of U.S. senators calling for increased AI innovation funding, testing of potential harms posed by AI and consideration of workforce implications. We will continue to monitor this space for further developments.
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