A revised version of Colorado’s artificial intelligence law — among the first in the country to regulate “consequential” decisions by the new technology — cleared both the House and Senate just one week after its introduction and is now headed to Gov. Jared Polis for his signature.
Backers framed Senate Bill 189 as the culmination of several years of work, a special session, a lawsuit, and months of task force meetings.
Assistant Majority Leader Jennifer Bacon, D-Denver, said the measure was crafted after the parties reached a consensus.
“While there are people who feel like we should have gone further on both sides of the conversation, what we are presenting to you today is the result of consensus,” said Bacon, who sponsored the legislation, along with Senate President James Coleman, D-Denver, Senate Majority Leader Robert Rodriguez, D-Denver, and House Majority Leader Monica Duran, D-Wheat Ridge.
The bill passed on a 56-7 vote.
It remains to be seen if Polis would sign the measure, veto it or let it become law without his signature. He had signed the 2024 legislation with much reservation, worried about its impact on one of the fastest-growing sectors in the American economy.
The new legislation is intended to replace that law adopted in 2024, which was amended during a special session last year to delay its implementation date.
Supporters had insisted that law was a safeguard against algorithmic discrimination, but critics argued it was overly burdensome and impractical to implement.
Several weeks ago, Elon Musk filed a lawsuit against the state on behalf of his company, xAI, alleging that the 2024 law violates the U.S. Constitution by forcing artificial intelligence developers to adopt “ideological views” and by regulating interstate commerce.
Late last month, a federal judge issued a 14-day stay blocking the state from enforcing the 2024 law, pending the court’s ruling on xAI’s request for a preliminary injunction. Both sides agreed to the pause.
In an April 24 filing, the parties also noted that Attorney General Phil Weiser would not pursue enforcement actions against xAI during that period.
Under the agreement, Musk’s xAI will file its motion for a preliminary injunction within 28 days after the state finalizes rulemaking for Senate Bill 24‑205 or any new legislation that amends or replaces it, including this year’s Senate Bill 189.
Under SB 189, developers of “automated decision-making technology” — defined as technology that processes personal data and uses computation to generate output to make, guide, or assist in a decision, judgment, or determination concerning an individual — would be required to disclose the technology’s intended use to deployers and users. The bill also requires developers to notify deployers of the categories of training data, known limitations, and instructions for appropriate use and human review.
The legislation also includes user disclosure requirements. Under the measure, if a consumer alleges that the automated decision-making was used to make a consequential decision resulting in an “adverse outcome,” deployers will be required to provide a description of the role the technology played in influencing that decision.
The bill also grants consumers the right to request personal data, to have incorrect data used in automated decision-making corrected, and to request “meaningful human review” following a consequential decision resulting in an adverse outcome.
Lawmakers passed the legislation amid lingering worries, highlighted by a growing body of research, that businesses are packing to leave Colorado because of heavy regulatory intervention in industries.
The issue of corporate loss was underlined in February, when Palantir Technologies, with a market capitalization reported at $328 billion, announced it would move its corporate headquarters from Denver to Miami.
The departure earned speculation that regulatory issues, including the 2024 artificial intelligence law, as well as Florida’s balmy tax climate, had motivated the pending departure.
Palantir had compared Colorado’s “state-level oversight” to the European Union’s Artificial Intelligence Act.
“Compliance with such obligations may be difficult, onerous, and costly, and could adversely affect our business, reputation, financial condition, results of operations, and growth prospects,” the company said in an annual report.
Last month, the Colorado Chamber Foundation issued a report tracking companies that are relocating out of state.
The foundation’s report noted that federal SEC filings show Colorado suffered a net loss of 34 public company headquarters since 2022. The figure weighed a total loss of 70 headquarters against a gain of 36.
Some 20 of those headquarters losses occurred in 2024, the report noted. Last year, Colorado saw its headquarters rankings slip to the lowest level over a seven-year span since 2019.
According to the tracker, the decision by corporations to head in other directions cost the state 13,600 jobs since 2019 in situations where a job impact could be measured. The numbers combined companies that left the state or that chose competing states over Colorado for opportunities to move or expand.
Marianne Goodland, Mark Samuelson and Bernadette Berdychowski contributed to this story.