Colorado has taken a significant step towards ensuring ethical AI use under a new bill signed into law by Governor Jared Polis (D) on May 17, 2024. This legislation, SB 24-205, mandates developers and deployers of so-called “high-risk AI systems” to exercise reasonable care to prevent algorithmic discrimination.

For AI developers, reasonable care involves several critical steps, as outlined by Colorado’s AI bill. These include providing deployers with detailed information about the AI system and necessary documentation for impact assessments. Under the bill, developers must also make public statements about the types of high-risk AI systems they have developed or substantially modified and disclose any potential risks of algorithmic discrimination to Colorado’s attorney general and known deployers within 90 days of discovering said risks.

Similarly, deployers of high-risk AI systems are required to implement comprehensive risk management policies and conduct impact assessments. They must review their AI systems annually to make sure no algorithmic discrimination occurs. Additionally, deployers need to inform consumers about the system’s decision-making processes, offer opportunities for correcting inaccurate personal data, and allow for appeals against adverse decisions through human review, if at all feasible. They must also disclose any algorithmic discrimination discovered to Colorado’s attorney general within 90 days.

In Governor Polis’ signing statement for SB 24-205, he expressed reservations about its potential impact on innovation and the AI industry. While he noted his support of the bill’s goal to prevent algorithmic discrimination and protect consumers, he outlined his concern about the complex compliance regime and its effects on technological advancement. To avoid a patchwork of state laws that could stifle competition, Polis wrote about the need for a federal approach to AI regulation. With the bill not taking effect until 2026, Polis encouraged the legislature and other stakeholders to further refine the provisions in the bill.

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