Colorado has become the first state to pass a bill protecting its residents from artificial intelligence (AI) discrimination.
Senate Bill 24-205 was pushed by State Senate Majority Leader Robert Rodriguez. It was modeled after Connecticut’s AI bill, which passed through the Senate in a 24-12 vote. However, weeks later, Governor Ned Lamont threatened to veto the bill if it passed the House of Representatives, effectively killing it.
Colorado was seeking to do what Connecticut failed to, and two weeks ago, Governor Jared Polis signed the bill into law.
The Colorado AI Act targets developers and deployers of ‘high-risk’ AI systems. A system is considered high-risk if it’s used to make consequential decisions that can impact decisions such as housing, medical cover, and employment.
The Act seeks to ensure that AI doesn’t influence decisions based on algorithmic discrimination, which it describes as a “condition in which the use of an artificial intelligence system results in an unlawful differential treatment or impact that disfavors an individual or group of individuals.”
AI discrimination has been one of the technology’s most pressing challenges. The bill says AI must be free of bias when used to make life-changing decisions, such as hiring, housing, credit facilities and medical care.
The challenge of regulating AI
Colorado’s step is monumental in policing AI in the United States and beyond. While the EU’s AI Act sets the standard, Europe lags significantly behind Asia and the U.S. in AI development, limiting the bill’s influence.
And yet, despite all involved parties agreeing to the need for AI regulation, they have failed to find a middle ground. In the U.S., over three dozen states are still debating close to 400 separate bills, but few have been signed into law, and certainly none as impactful as Colorado’s.
In Connecticut, which was setting the pace before Gov. Lamont’s veto threat, powerful lobbying forces from the tech sector managed to stop the bill even after the State Senate passed it.
Gov. Lamont later claimed that it was “premature” for the state to regulate the technology and that Connecticut must “let the entrepreneurs have a little room to run so we see where this can take us.”
California, the global hotspot for AI development, has also failed to regulate the technology. A push by some legislators, led by Assemblymember Rebecca Bauer-Kahan, to protect residents from AI algorithmic discrimination died off due to lobbyists’ pressure.
The California bill was similar to the ones passed in Colorado and rejected in Connecticut. After Colorado passed its bill, Bauer-Kahan told one outlet that she was thrilled that a bill “so similar” to her own had sailed through.
“These efforts across the country clearly show that Americans want — and deserve — protections from biased decision tools,” she stated.
However, whether other states can take the leap, like Colorado, remains to be seen. Even in Colorado, local AI startups denounced the bill, claiming it would stifle innovation.
“My fear is that it will absolutely stifle innovation for small companies like mine. I just don’t understand why we’re rushing legislation,” lamented Kyle Shannon, the founder of local startup AI Salon.
The U.S. Chamber of Commerce also wrote to Gov. Polis urging him not to sign the bill into law.
While the governor ignored the pleas, he wrote to the State Senate, claiming that he had signed despite having reservations. He urged the lawmakers to reexamine the bill before it takes effect in February 2026 to ensure it doesn’t stifle innovation.
A significant caveat of the Colorado bill is that it only allows the state’s attorney general to sue AI developers and deployers if they fail to abide by its provisions. It insulates the AI firms by barring individuals from pursuing them for any violations.
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