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Colorado Passes First U.S. AI Regulations

Colorado's new artificial intelligence law targets discrimination risks when companies use it. It is the first law in the country to regulate the use of AI, according to The Denver Post. Beginning in 2026, Colorado will require organizations using AI to "make 'consequential' decisions to disclose the use and purpose of the technology to consumers, job applicants and others who interact with it." If an employer uses AI to screen a job applicant, it must inform the applicant that they are interacting with it and share why the company uses it. If an applicant is rejected from a job or apartment, the entity using AI must give the applicant an explanation. AI developers must share what they are doing to test for AI bias built into the system. Lawmakers said they want to limit AI's ability to discriminate against certain groups. The law does not modify any current discrimination protections.

Other U.S. states have tried to pass AI regulations but have been unsuccessful. The European Union did approve AI regulations this year. The tech industry, industry associations, and labor groups opposed Colorado’s regulation. Labor groups expressed concern the law could be used to get around discrimination protections, while consumer advocates wanted tighter rules. Tech groups continue to oppose it, but the others have dropped their vocal objections. The law exempts smaller businesses and allows companies to protect trade secret information. Gov. Jared Polis signed the law but wrote a statement indicating that he was “concerned about the impact this law” could have on the tech industry and AI developers. He expressed hope lawmakers would continue to refine the law before it goes into effect. 

Tech groups argue these regulations may limit AI innovation and advocate for a uniform federal approach that could offer a "balanced and appropriate AI policy" with rules and guardrails. Colorado lawmakers seemed concerned about federal lawmakers taking timely action and asserted their bill is a foundation for regulating AI to evolve as the tech moves forward.