DENVER — Colorado’s landmark comprehensive artificial intelligence law is facing continued pushback from the business community as its revised rollout approaches, state officials and industry representatives said.
The Colorado AI Act, originally passed in 2024 as Senate Bill 24-205, imposed obligations on developers and deployers of high-risk AI systems used in consequential decisions such as employment, housing, health care, education and lending. It required reasonable care to prevent algorithmic discrimination, risk management programs, impact assessments and consumer disclosures.
Business groups and technology companies have long argued that the law’s requirements were overly broad, vague and burdensome, potentially stifling innovation and imposing high compliance costs, particularly on smaller firms. Critics said the original framework could drive businesses to relocate operations outside the state.
In response to the opposition, lawmakers delayed the original February 2026 effective date to June 30, 2026, following a special legislative session in August 2025. Further revisions followed, including a lawsuit filed by xAI in April 2026 challenging the law on constitutional grounds, with intervention by the federal government.
On May 14, 2026, Gov. Jared Polis signed Senate Bill 26-189, which repeals and replaces the original act with a narrower framework focused on automated decision-making technology (ADMT) in consequential decisions. The revised law shifts emphasis toward transparency, documentation and consumer rights rather than extensive risk assessments and discrimination reporting. It is set to take effect on January 1, 2027, pending rulemaking by the state attorney general.
Industry representatives have welcomed the changes as more workable. “The revisions address many of the practical concerns raised by businesses while still providing important consumer protections,” a spokesperson for a coalition of technology firms said in a statement.
Consumer advocates, however, have expressed disappointment over the scaling back of certain safeguards. Some lawmakers who supported the original bill criticized the intensity of business lobbying during negotiations.
The Colorado attorney general’s office has agreed to suspend enforcement of the prior version pending resolution of ongoing litigation and the implementation of the amended law. Details on final rulemaking timelines remain under discussion.
As of Tuesday, the state continues to engage stakeholders on the revised regulations. The business community’s sustained opposition has significantly shaped the law’s evolution ahead of its delayed implementation.
