Colorado passes new AI regulation

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On May 17, 2024, the state of Colorado achieved a significant milestone in artificial intelligence (AI) regulation. This achievement came in the form of a comprehensive new AI law that aimed to comprehensively address the mounting concerns surrounding high-risk artificial intelligence systems and their potential societal impacts. The legislation embraced a robust risk management framework designed to proactively mitigate foreseeable risks and avert issues such as algorithmic discrimination, thus promoting the responsible development and deployment of AI systems.

This groundbreaking law not only safeguarded consumers but also upheld the integrity of critical government services, financial and lending services, housing, insurance, legal services, and more. It imposed stringent oversight and accountability measures on developers and deployers of high-risk AI systems, amplifying the importance of transparency, fairness, and safety. By emphasizing the need for transparency, this law sought to foster trust and confidence in the responsible use of AI technology.

High-risk AI systems: Definition and classification

High-risk AI systems have the potential to significantly impact individuals’ rights and safety. A substantial factor in defining high-risk AI systems is their potential to make or assist in making consequential decisions. These include systems used in critical areas such as healthcare, law enforcement, employment, and financial services. Colorado law aligns with the European Union’s AI Act in classifying AI systems into various risk levels, with high-risk systems subject to the most rigorous regulations.

The classification of high-risk AI systems is based on their intended use and the context in which they operate. For instance, AI systems that handle sensitive personal data, make consequential decisions affecting individuals, or perform narrow procedural tasks in critical sectors are deemed high-risk. These systems must undergo thorough risk assessments and adhere to strict compliance standards to ensure they do not cause harm.

Risk management policy and framework

Implementing a comprehensive risk management policy to address known or foreseeable risks is a central aspect of the new AI regulation. This policy requires AI developers and deployers to identify, assess, and mitigate the known or reasonably foreseeable risks associated with their systems. The risk management framework includes conducting impact assessments, maintaining transparency, and ensuring human review of AI decisions.

Developers must establish robust risk management policies encompassing all AI system development and deployment stages. These policies should address data quality, model accuracy, and the potential for algorithmic discrimination. By fostering a culture of responsibility and accountability, the regulation aims to prevent adverse outcomes and promote AI technologies’ safe and ethical use.

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Addressing algorithmic discrimination

One of the primary concerns addressed by Colorado’s AI regulation is the risks of algorithmic discrimination. This occurs when AI systems produce biased outcomes that disproportionately affect certain groups based on race, gender, socioeconomic status, or other protected characteristics. The law mandates measures to avoid and mitigate such discrimination, ensuring AI systems operate fairly and equitably.

Developers must use diverse and representative training data to minimize biases in AI models. Additionally, the regulation promotes transparency by obligating companies to disclose their AI systems’ criteria and decision-making processes. This allows for greater scrutiny and accountability, helping to prevent unlawful differential treatment and protect individuals’ rights.

Ensuring accuracy of personal data

The accuracy of personal data processed by AI systems is critical to preventing incorrect or unfair outcomes. Colorado’s new regulation stipulates that AI systems handling personal data must implement stringent data validation and verification processes. This includes correcting inaccuracies and ensuring the data used is up-to-date and relevant to the AI system’s intended use.

Individuals have the right to challenge and seek rectification in cases where incorrect personal data leads to adverse decisions. This provision is vital for maintaining trust in AI technologies and safeguarding individuals from harm caused by erroneous data processing. It also emphasizes the importance of data governance and the ethical use of personal information in AI applications.

Obligations for developers and deployers

The new AI law places significant responsibilities on developers and deployers of high-risk AI systems. Developers must conduct impact assessments after any intentional and substantial modification to high-risk AI systems. They must conduct thorough impact assessments to identify potential risks and implement measures to mitigate them. This includes evaluating the potential for algorithmic discrimination, ensuring data accuracy, and maintaining transparency in decision-making processes.

Developers must also ensure that their AI systems undergo regular audits and evaluations to verify compliance with the regulation. These audits help identify issues or deviations from established standards, allowing for timely corrective actions. By holding developers accountable, the law aims to foster a culture of ethical AI development and deployment.

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Human review and oversight

The regulation mandates human review and oversight of high-risk AI systems to ensure the responsible use of AI. This involves having human operators monitor and intervene in AI systems’ decision-making processes, particularly in critical areas such as healthcare, law enforcement, and financial services. Human review helps catch and correct errors, preventing adverse outcomes caused by automated decisions.

The requirement for human oversight is intended to balance the benefits of automation with the need for accountability and ethical considerations. It ensures that AI systems do not operate in a vacuum but are subject to human judgment and intervention when necessary. This approach helps mitigate risks and promotes AI technologies’ safe and ethical use.

Impact assessments and accountability

Impact assessments are a crucial component of the new AI regulation. These assessments involve evaluating the potential effects of AI systems on individuals and society, identifying foreseeable risks of algorithmic discrimination, and implementing measures to mitigate them. Developers and deployers must conduct these assessments throughout the lifecycle of the AI system, from development to deployment and beyond.

The regulation also establishes mechanisms for accountability, requiring developers to document and report their impact assessments and risk mitigation strategies. This transparency allows regulators and stakeholders to monitor compliance and hold companies accountable for violations. The law ensures that AI systems are developed and used responsibly by promoting accountability.

Protecting consumers and essential services

Colorado’s new AI regulation aims to protect consumers and ensure the safe and ethical use of AI in essential services. This includes sectors such as healthcare, education, financial services, housing, and legal services. The regulation aims to prevent adverse consequences for individuals by ensuring that AI systems operate fairly, transparently, and without bias.

The law also seeks to safeguard essential government services from the risks associated with high-risk AI systems. By mandating strict compliance standards and promoting transparency, the regulation helps maintain public trust in AI technologies and ensures that these systems serve the intended benefits without causing harm.

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Addressing foreseeable and unforeseen risks

Colorado’s AI regulation emphasizes the importance of addressing both known and reasonably foreseeable risks associated with AI systems, including the foreseeable risks of algorithmic discrimination. This includes identifying potential issues during the development phase and implementing measures to mitigate them. Developers must also be prepared to address new and unforeseen risks that may arise as AI technologies evolve.

The regulation encourages a proactive approach to risk management, requiring developers to monitor and update their risk assessments and mitigation strategies continuously. By staying ahead of potential risks, the law aims to prevent adverse outcomes and ensure the safe and ethical use of AI technologies.

The legal and regulatory framework established by Colorado’s new AI law is comprehensive and forward-looking. It incorporates best practices from international regulations, such as the EU AI Act, and adapts them to Colorado’s specific needs and context. The framework sets clear guidelines for developers and deployers of high-risk AI systems, ensuring they adhere to stringent compliance standards and regulatory requirements.

The regulation also establishes the role of the Colorado Attorney General in overseeing and enforcing the law. The Attorney General is responsible for investigating violations, imposing penalties, and ensuring that AI systems are used responsibly and ethically. This oversight helps maintain the integrity of the regulatory framework and promotes public trust in AI technologies.

Global influence and collaboration

The regulation of AI in Colorado is expected to have a significant impact on AI governance frameworks on a global scale. The high standards set for risk management and consumer protection in this legislation are likely to serve as a model for international collaboration and harmonization of AI regulations. With the increasing interconnectedness and complex nature of AI technologies, a global approach to regulation is crucial for effectively addressing the challenges posed by AI.


The new AI regulation in Colorado marks a significant milestone in the effort to ensure that AI technologies are used in an ethical and responsible manner. The regulation specifically targets high-risk AI systems and aims to mitigate associated risks by establishing a comprehensive risk management framework. Its primary goal is to safeguard consumers and promote the safe and fair use of AI. One of the key aspects of the regulation is its potential to set a precedent for other states and regions to emulate, thereby underscoring the importance of proactive and holistic AI governance.

Furthermore, the emphasis placed on transparency, accountability, and human oversight within the law is designed to ensure that AI systems operate in a manner that upholds the rights of individuals and prevents potential harm. This is particularly crucial as AI technologies continue to advance. Overall, Colorado’s AI regulation is positioned as a model for achieving a balance between technological innovation and ethical considerations. It creates a framework that fosters a future where AI benefits all members of society.

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