Colorado Artificial Intelligence Act

While the EU was making headlines with its AI Act, the US is quietly making its own moves in the AI regulation arena. Colorado has taken the lead, enacting the Colorado Artificial Intelligence Act (CAIA), the first comprehensive AI law in the United States. This pioneering legislation, set to take effect on February 1, 2026, signals a significant shift in how AI is developed and deployed in the US.  

What is the Colorado AI Act?

The CAIA focuses on consumer protection in interactions with AI systems. It adopts a risk-based approach similar to the EU AI Act, but with a narrower scope, concentrating on the potential for "algorithmic discrimination." This means the law is particularly concerned with AI systems that may unfairly disadvantage individuals or groups based on protected characteristics like race, gender, age, or disability.  

Key Provisions of the CAIA:

• High-Risk AI Systems: The CAIA primarily targets "high-risk AI systems" used in consequential decisions, such as those impacting employment, housing, financial services, healthcare, and education.  

• Consumer Protections: Developers and deployers of high-risk AI systems must take "reasonable care" to avoid algorithmic discrimination. This includes conducting impact assessments, testing for bias, and providing explanations for AI-driven decisions.  

• Transparency Requirements: Developers and deployers must publish clear statements outlining how they manage the risks of algorithmic discrimination.  

• Consumer Rights: Consumers have the right to know when they are interacting with an AI system and to request information about how it works.  

Why is the Colorado AI Act Relevant to Businesses?

Even if your business isn't based in Colorado, the CAIA could impact you if you offer services or products to Colorado residents that involve AI systems. Here's why businesses should pay attention:

• Compliance is essential: Non-compliance can lead to legal challenges, fines, and reputational damage.  

• It sets a precedent: Colorado's law may inspire other states to enact similar legislation, potentially creating a patchwork of AI laws across the US.  

• It promotes responsible AI: The CAIA encourages businesses to prioritize fairness, transparency, and accountability in their AI development and deployment.  

• It builds trust: By complying with the CAIA, businesses can demonstrate their commitment to ethical AI and build trust with their customers.  

How can businesses prepare for the Colorado AI Act?

• Assess your AI systems: Determine if you develop or deploy high-risk AI systems that may impact Colorado consumers.  

• Develop a compliance strategy: Implement measures to mitigate the risk of algorithmic discrimination, including impact assessments, bias testing, and explainability mechanisms.  

• Prioritize transparency: Publish clear statements about how you manage AI risks and inform consumers when they are interacting with AI systems.  

• Stay informed: Keep up-to-date on the latest guidance and interpretations of the CAIA.

Aetos Data Consulting can help you navigate the complexities of the Colorado AI Act and ensure your AI initiatives are compliant and ethical. Contact us today to learn more.