Colorado Governor Jared Polis signed the Colorado Artificial Intelligence Act (CAIA) into law on May 17, 2024, making Colorado the first state in the US to implement comprehensive AI legislation. This law aims to protect consumers from algorithmic discrimination while ensuring transparency and accountability in AI deployment.
The Colorado AI Act requires developers and deployers of high-risk AI systems to implement formal risk management frameworks and detailed oversight practices. Developers must provide comprehensive documentation about AI systems, including data sources, performance metrics, and monitoring efforts. Consumers have the right to pre-use notice, explanation, correction, and appeal when AI systems are used to make consequential decisions about them.
The law is enforced by the Colorado Attorney General's office, which has exclusive authority to enforce the law, with potential civil penalties of up to $20,000 per infraction. Some industry stakeholders have expressed concerns about the law's breadth and potential impact on innovation, citing overly broad definitions of "high-risk" AI systems and liability for developers.
There are also concerns about the cost of implementing the law, with state agencies estimating costs of up to $5 million, which may lead to delays or amendments. Despite these challenges, Colorado's AI law may serve as a model for other states, potentially triggering a wave of state-by-state AI compliance requirements.
Companies are advised to begin aligning their practices with recognized frameworks, such as the National Institute of Standards and Technology (NIST) AI Risk Management Framework, to avoid costly compliance risks. As AI continues to evolve and play a larger role in various industries, laws like the CAIA will be crucial in ensuring that AI systems are developed and deployed in a responsible and transparent manner.
