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ARTICLE · 01 JUNE 2026

Colorado’s Second Take On AI Regulation

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SB 189 replaces the Colorado AI Act with a narrower, business-friendly AI regulation that applies only when AI materially influences consequential decisions in areas like employment, lending, and healthcare.

United StatesTechnology
Faheem S. Ali
Faheem S. Ali
Emily A. Burrows
Emily A. Burrows

Key Takeaways

  • SB 189 replaces the Colorado AI Act with a narrower, business-friendly AI regulation that applies only when AI materially influences consequential decisions in areas like employment, lending, and healthcare.
  • Businesses that develop or deploy AI systems must implement transparency requirements, including pre-use notices, post-adverse outcome disclosures, and documentation on data, risks, and human oversight.
  • The law introduces consumer rights, including data correction and human review, and shared liability rules, requiring companies to reassess AI compliance programs, vendor contracts, and prepare for the January 1, 2027 effective date.

On May 14, Colorado Governor Jared Polis signed SB 189 into law, repealing the Colorado AI Act and replacing it with a narrower, more business-friendly regulatory framework governing the use of automated decision-making technology in consequential decisions. The new law takes a different approach to regulating artificial

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