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A Deep Dive into Colorado's Artificial Intelligence Act

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Relevant for tracking US state-level AI regulation; Colorado's AI Act is a landmark piece of legislation that may set precedent for how AI systems are governed at the state level in the absence of federal AI law.

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Importance: 55/100news articleanalysis

Summary

This article from the National Association of Attorneys General examines Colorado's Artificial Intelligence Act, analyzing its key provisions including the affirmative defense mechanism available to developers and deployers of high-risk AI systems. It explores how the law addresses algorithmic discrimination and what compliance obligations it imposes on AI developers operating in Colorado.

Key Points

  • Colorado's AI Act targets 'high-risk' AI systems that make consequential decisions in areas like employment, housing, education, and financial services.
  • The law establishes an affirmative defense for developers and deployers who follow prescribed risk management practices and disclosure requirements.
  • Developers must use reasonable care to protect consumers from known or reasonably foreseeable risks of algorithmic discrimination.
  • Deployers are required to conduct impact assessments and implement risk management policies for high-risk AI systems.
  • The Act represents one of the first comprehensive state-level AI governance laws in the US, influencing other state legislative efforts.

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Colorado Artificial Intelligence ActPolicy53.0

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 October 26, 2024 Consumer Protection 
 
 
 
 
 
 
 
 
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 On May 17, 2024, Colorado Governor Jared Polis signed into law Senate Bill 24-205, known colloquially as the Colorado Artificial Intelligence Act (hereinafter the CAIA). 1 . The legislation is formally titled in the document as “An Act Concerning Consumer Protections for Interactions with Artificial Intelligence,” but many practitioners have been referring to the law as the “Colorado AI Act” or the “Colorado Artificial Intelligence Act.” )) This legislation, set to take effect on February 1, 2026, makes Colorado the second U.S. state to enact a major artificial intelligence consumer protection law, reflecting another significant step towards state-level regulation of AI. Colorado’s law follows one enacted in Utah in March, 2 ).  The CAIA also follows draft regulations under the California Privacy Protection Act (CPPA) see infra at n. 39. )) as well as a New York City law passed in 2021 affecting automated employment decisions. 3 . )) However, the CAIA imposes farther-reaching requirements, including a new general duty of care for developers and deployers of AI to protect individuals from algorithmic discrimination—which Colorado defines as any differential “treatment or impact” resulting from the use of an artificial intelligence system—on the basis of protected characteristics. 4   The CAIA has been compared to the European Union’s recent AI Act, although it is less stringent and more narrowly drawn in several key ways. 5 The CAIA affects predictive artificial intelligence systems which make decisions, not newer generative artificial intelligence like ChatGPT which create content.

 In the absence of congressional action, Colorado’s law may help to set the tone for predictive artificial intelligence regulation nationwide, and it may impact the behavior of developers and deployers across state lines as they seek compliance with Colorado’s requirements. Practitioners note that Colorado’s law may influence other states’ pending legislation, 6 and disputes concerning its requirements may first arise in employment disputes. 7 

 Definitions and Obligations

 The CAIA’s goal is to protect individuals from algorithmic discrimination by artificial intelligence systems operating in Colorado. Specifically, it protects people from artificial intelligence systems which are “high-r

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