Organizations representing the technology industry are urging Colorado Gov. Jared Polis to veto a bill they say could negatively impact small businesses developing cutting-edge artificial intelligence technology.
Senate Bill 205 establishes regulations governing the development and use of artificial intelligence in Colorado and focuses on preventing “algorithmic discrimination,” which it describes as any condition in which AI increases the risk of “unlawful differential treatment” that then “disfavors” an individual or group of people on the basis of age, color, disability, ethnicity, genetic information, race, religion, veteran status, English proficiency and other classes protected by state laws. It requires developers to exercise “reasonable care” to prevent discrimination when using “high-risk” artificial intelligence systems, defined as systems involved in making “substantial or consequential” decisions. Provisions of the bill include requiring developers to implement a risk management policy, complete an impact assessment for high-risk systems, and notify consumers if artificial intelligence is being used to make a consequential decision regarding a consumer.
Letters sent to the governor from Chamber of Progress, Consumer Technology Association, and the US Chamber of Commerce urge the Polis to veto the bill due to its potential ability to stifle innovation and put small businesses at a disadvantage against large corporations.
“Guardrails are important when gaps exist in existing laws and regulations, including in areas like AI,” stated the letter from the US Chamber of Commerce. “However, no comprehensive analysis to determine regulatory gaps was undertaken before SB 205 was introduced, and little attention was focused in this area as the bill proceeded through the legislative process. We believe Colorado should undertake a detailed and rigorous review of the implications of proposed Artificial Intelligence (AI) regulations on Colorado businesses and consumers before legislation is enacted.”
Small business owners who testified in opposition to the bill during the legislative session made similar points and requested lawmakers engage with them to come to a mutual solution.
“Innovation should be encouraged and not stifled, and any legislative measure should strike a balance between consumers and fostering technological advancement,” said Michael McReynolds from the Governor’s Office of Information Technology. “The bill is implementing measures that may not be feasible or effective.”
Some tech companies, however, support the bill, especially because there are no similar regulations for artificial intelligence at the federal level yet.
Beth Rudden, CEO of Bast AI, called the bill a “pragmatic and necessary measure” to maintain the integrity of artificial intelligence systems. She argued that the bill is not just about compliance within the industry, but also about holding developers accountable for unethical actions.
“By supporting this bill, we commit to a path that respects consumer rights, promotes transparency, and fosters trust in the technologies that are shaping our future,” she concluded.
Polis has until June 7 to make a decision on the bills that were passed this legislative session; if no action is taken on a bill, it automatically becomes law.