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What Concerns Underlie the Colorado AI Act?

What Concerns Underlie the Colorado AI Act?

May 2024

Information Industry News

Quick Summary

The Future on Privacy Forum has created a useful two-page summation of the Colorado AI Act which was signed into law on May 17, 2024. 

Colorado AI Act (CAIA) is the first comprehensive and risk-based approach to artificial intelligence (AI) regulation in the United States. This overview highlights the law’s requirements governing the private sector's use of AI, including developer and deployer obligations, consumer rights for transparency and the ability to appeal, and enforcement. CAIA will become effective February 1, 2026.

The summary sheet notes obligations placed by the law on developers and deployers, as well as outlining the rights of the public consumer. 

Commentary on the CAIA legislation from national law firms included this note from Troutman-Pepper:

The legislative impetus for the act is the concern that consequential decisions, when influenced or driven by AI systems, can potentially lead to “algorithmic discrimination.” The act defines algorithmic discrimination 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” on the basis of protected classifications. Accordingly, the act imposes various documentation, disclosure, and compliance obligations on developers and deployers that are intended to identify and prevent such discrimination.

There is an emerging consensus that other state legislatures will be considering the Colorado legislation as a model for their own efforts at regulation. 

The full text of the legislation may be found here. An additional statement from Colorado Governor Jared Polis expressed some of his hesitations regarding the effect of the bill:

"I am concerned about the impact this law may have on an industry that is fueling critical technological advancements across our state for consumers and enterprises alike...Government regulation that is applied at the state level in a patch work across the country can have the effect to tamper innovation and deter competition in an open market." 

His letter goes on to express hope for a "needed cohesive federal approach" establishing a balance between the needs of consumers and the economic boom promised by the new technology.