Colorado is the first state in the nation to pass a law regulating the use of artificial intelligence.
But state leaders are now asking the legislature to delay the law’s implementation until January 2027.
The governor, attorney general, Denver’s mayor, and members of Colorado’s congressional delegation signed a letter saying stakeholders need more time to develop a framework that “protects privacy and fairness without stifling innovation or driving business away from our state.”
The law is set to take effect in February of 2026 and would require businesses to disclose when the technology is being used for consequential decisions, like employment, bank loans, housing, and education.
The governor and bill sponsor agreed to work with business, consumer, and civil rights groups on revisions to the law before implementation, but after hundreds of hours of negotiations, there is no compromise, and the legislative session ends Wednesday.
The new law not only applies to tech companies but almost every company in Colorado that has more than 50 employees and uses software to make decisions.
“Both the people who build the software and the people who use it are affected by this bill,” says Bryan Leach, founder and CEO of the Denver tech company Ibotta.
Leach says most businesses use software like Indeed to sort job applicants and, under the law, they will need to disclose possible biases the software might have: “You have to guess what the possible unintended, disparate impacts are and list out all of your steps of mitigation, even though you’re not a developer of the software.”
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Business owners would also have to respond to anyone who thinks the software discriminated against them, and if they don’t like the answers, they can appeal to the Attorney General’s Office.
“Now every person who doesn’t like the pile they’re in, or the stage they get to, can force an accounting individualized to them from the developer and the deployer,” says Leach. “This is a job-destroying bill.”
Democratic state Sen. Robert Rodriguez, who’s led the charge for the AI regulations, says it’s simply about bringing more transparency to the technology.
“Would you like a computer telling you if you could have your job without an interview?” Rodriguez says. “Basically the bill is ‘just try. Be responsible. Test your systems. Tell people how it works.’ And if you do that, you’re never getting in trouble. If you mess up and you try and fix it, you’re never in trouble.”
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Consumer and civil rights groups say the law and a compromise bill Rodriguez introduced last week don’t go far enough when it comes to transparency and enforcement.
Rodriguez ended up killing the bill on Monday, and with the legislature adjourning Wednesday, the only way to delay the law’s implementation is for the governor to call a special session.
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