Colorado recently passed a new law, S.B. 24-205, focused on protecting consumers from potential risks associated with high-risk artificial intelligence (AI) systems. This law, effective starting February 1, 2026, is the first of its kind in the United States and places strict compliance requirements on developers and deployers of high-risk AI systems.
Under this law, developers and deployers of high-risk AI systems are required to exercise reasonable care to prevent algorithmic discrimination that could impact consumers in various areas such as education, employment, financial services, government services, healthcare, housing, insurance, and legal services. The Colorado Attorney General will be responsible for enforcing this law, and any violations will be considered unfair and deceptive trade practices under the state’s Consumer Protection Act.
It is important to note that not all AI systems are considered high-risk. While high-risk AI systems must adhere to the compliance requirements outlined in the law, AI systems designed for narrow procedural tasks or decision-making patterns are exempt. Additionally, developers and deployers must conduct impact assessments and implement risk management policies to identify and mitigate any potential risks of algorithmic discrimination.
Developers are required to report any known or foreseeable risks of algorithmic discrimination to the Colorado AG within 90 days of discovery, while deployers must report instances of discrimination caused by high-risk AI systems within the same timeframe. The goal of this law is to ensure that consumers are protected from any discriminatory practices that may arise from the use of AI technology.
Overall, Colorado’s AI consumer protection law sets a precedent for other states to follow in regulating the use of high-risk AI systems and ensuring that consumers are safeguarded from algorithmic discrimination. By imposing strict compliance requirements and reporting mechanisms, this law aims to promote transparency and accountability in the development and deployment of AI technology.