Mile-High Risk: Colorado Enacts Risk-Based AI Regulation To Address Algorithmic Discrimination

On May 17, Colorado Governor Jared Polis signed into law the Colorado Artificial Intelligence Act (SB 205)("CAIA"), a measure passed out of the legislature on May 8 and now scheduled to become effective February 1, 2026. The CAIA aims to combat intentional and unintentional algorithmic discrimination through new, broad-based notice, disclosure, risk mitigation, and opt-out requirements for developers and deployers of "high-risk" artificial intelligence ("AI") systems and disclosures applicable to AI systems generally.

Governor Polis' signing statement acknowledged his reservations in signing the bill, noting that the measure creates a "complex compliance regime" for AI developers and deployers operating in Colorado and interacting with Colorado residents, which could add to the potential for additional states taking action, resulting in a patchwork of state laws that could tamper innovation and deter competition. In that regard, the governor also called for federal