On February 1, 2026, the Colorado Act Concerning Consumer Protections in Interactions with Artificial Intelligence (Colorado AI Act) will go into effect. This is the first state law in the U.S. directly placing obligations on developers and deployers of AI systems.
Here are the key points of this groundbreaking legislation:
- The Act sets requirements on the use of “high-risk” systems such as AI decision-making in banking, hiring, and housing.
- It requires developers and deployers of these systems to “avoid discrimination.”
- It also provides that certain disclosures be made to consumers regarding these systems.
Who does it apply to: Developers of AI systems in the state of Colorado and deployers of high-risk AI systems within the state.
When does it become effective: February 1, 2026
What does it do: Developers and deployers must use “reasonable care” to avoid algorithmic discrimination
Why was this law created: To address potential consumer harms resulting from the use of AI in the state and create certain guidelines for companies creating AI systems
Potential Problems (or the law of unanticipated consequences which should have been anticipated): There are no internationally-recognized technological guidelines on how to prevent discrimination in AI leaving companies without in-house legal departments or data governance officers at a disadvantage. Small businesses wishing to innovate through the employment of AI systems will be the most at risk potentially harming the burgeoning startup community in Colorado. Colorado ranks 5th in the number of startups per capita according to a 2024 survey by WalletHub.
In the eyes of the law 