AI REGULATION IN COLORADO: WHAT AI DEVELOPERS NEED TO KNOW
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AI REGULATION IN COLORADO: WHAT AI DEVELOPERS NEED TO KNOW
Artificial Intelligence (AI ) is a great tool for business and individual use. It can help you find information online quickly, often with different and more digestible results than your average search engine provides. And with technology continuously advancing, AI usage has surged in recent years, nearly tripling since 2020.
Forbes reported, “378 million people will use AI tools in 2025,” which is 64 million higher than 2024, “making it the largest year-on-year jump,” in daily AI usage (Forbes, 2025). With this new tech tool, the US government, at both Federal and State levels, recognizes the need to regulate AI to protect user information.
Starting February 1, 2026, the Colorado AI Act will take effect, aiming to protect users of high-risk AI systems, (Colorado General Assembly, 2024).
What Are High-Risk AI Systems?
High-risk AI does not include your usual AI chatbots that help you make a workout plan, or AI virtual assistants that direct you to specific pages on a website. High-risk AI systems, such as agentic AI which has more ‘education’ and therefore more autonomy, help users make big decisions, reducing the need for so much human involvement, developing efficiencies in business operations. These AI systems, for example, may be used in job hiring or loan approval processes, or determination of health plan qualification.
Industries that may value from the use of high-risk AI systems include, (but are not limited to) education, HR, financial services, government services, healthcare, housing, insurance, and legal services.
But this article isn’t strictly for the general public – this is for AI developers and deployers. If you develop AI systems for any of these industries and operate in the state of Colorado, it is important you have a clear understanding of the new rules being put forth in the Colorado AI Act (SB 24-205).
The Colorado AI Act (for High-Risk Systems)
What Should AI “Builders” Do?
- Avoid unfair treatment toward users (based on their demographics). This is called algorithmic discrimination.
- Be honest with users about how your AI system works.
- Tell users how the use of your AI system could affect them.
- Share information with the public about what AI systems you and/or your team have built and your process for keeping things fair.
Note: If your AI system causes unfair treatment, you have 90 days to alert the Attorney General and all users of your system (Colorado General Assembly, 2024).
What Should AI “Users” Keep in Mind?
- Plan to lower your risk and maintain fair usage.
- Understand the impact that AI has on users. If, at work, you manage a team that uses a high-risk AI system, stay up to date on the AI system/s your team uses to ensure things are fair and safe.
- Be transparent. If your AI system makes decisions for your employees or clients, you must share that information with the employee/s or client/s affected.
- Share with the public which AI system/s you use and how the system maintains fairness in your business operations.
- Be attentive. If you notice unfair treatment from an AI system, bring this to the attention of your company’s legal department within 90 days of the situation occurrence.
- When in doubt, ask a human to approve or deny the AI system’s decision. High-risk AI systems such as agentic AI, are built to learn and adapt at you continually guide it in the ‘right’ direction by feeding information.
What Happens If I Break This Law?
Noncompliance with the Colorado AI Act is considered a “deceptive trade practice,” and can lead to financial consequences such as legal fees, monetary fines, paying damages to the affected party, and in serious cases – criminal penalties.
ATLAS Can Help
If your company uses or builds high-risk AI, follow all safety laws to lower your chance of accidental or intentional law breaking. If you are still unsure how to manage your AI usage or development, our partners at Executive Outsourcing can help you find a highly qualified Chief AI Officer (CAIO) or executive level AI Consultant well-versed in AI technology, regulations, and permissions, to help you and your company maintain fairness and safety.
Check out the Executive Outsourcing site to learn more about their services here:
https://www.executiveoutsourcing.com/
Thank you to our sources listed below for providing accurate information about the Colorado AI Act and AI usage.
Sources:
https://leg.colorado.gov/bills/sb24-205
