New AI regulation law in Colorado receives both praise and concerns, putting the state at the forefront of this issue.

New consumer protection bill praised but criticized by businesses & politicians for being too broad and creating compliance burden for AI users.

May 19th 2024.

New AI regulation law in Colorado receives both praise and concerns, putting the state at the forefront of this issue.
Colorado has made history by becoming the first state to pass a law that protects citizens from harmful artificial intelligence applications. While consumer protection agencies have praised the bill as a necessary and groundbreaking step in safeguarding individuals, businesses and some politicians are expressing concerns about its broad scope and potential impact on employees who utilize AI tools.

According to a report by the Colorado Sun, Governor Jared Polis signed Senate Bill 206 into law on May 17. However, in a letter addressed to legislators, Polis expressed his reservations about the bill, acknowledging its ambitious attempt to regulate the rapidly growing artificial intelligence industry. "I appreciate the sponsors' intention to prevent discrimination and prioritize consumer protection as Colorado takes the lead in this field," he wrote, "but I am also concerned about the potential consequences for an industry that is driving important technological advancements for both consumers and businesses in our state."

Governor Polis went on to express his worry that state-level regulation could stifle innovation and hinder competition in a rapidly evolving market. The bill is not set to take effect until February 1, 2026, giving lawmakers enough time to either strengthen its provisions or potentially weaken them, leaving employees vulnerable to predatory AI programs.

The passing of the bill was met with mixed reactions, with some expressing disappointment and others celebrating its enactment. The Colorado Technology Association, which represents over 300 technology companies in the state, spoke out against the bill, stating that it was rushed and lacked consideration for the tech industry. They raised concerns about the vague and broad requirements outlined in the bill, questioning how they would be implemented in practice.

The Rocky Mountain AI Interest Group, founded by Dan Murray, also opposes the bill. In an email to the Sun, Murray expressed disappointment in its passing, stating that he hopes legislators will engage with Colorado's thriving tech community to ensure that the bill does not hinder the state's important tech economy.

On the other hand, consumer advocates, such as Matt Scherer from the Center for Democracy & Technology, believe that the bill does not go far enough in protecting consumers from companies that may use AI in unethical ways. While Scherer has reservations about certain aspects of the bill, he understands that it was drafted based on model legislation written by an HR tech company.

In fact, the HR technology company Workday, which specializes in employment, expressed satisfaction with the bill's passage in an email to Governor Polis. Chandler Morse, the company's head of public policy, agreed with the Governor's assessment that the bill needs more focus before it can be implemented. "Senate Bill 205 is a crucial first step," he wrote, "and we hope that other states will follow suit in adopting a common approach to regulating AI."

The passing of the Colorado AI Act has sparked a lively debate between those who believe it is a necessary step in protecting citizens and those who fear it could hinder technological progress and innovation. With the bill not taking effect for a few years, there is still time for discussions and potential adjustments to be made. Only time will tell how this groundbreaking legislation will impact the state and the tech industry as a whole.

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