Governor vows big revisions to Colorado’s first-in-the nation AI law

Four weeks after a contentious Colorado bill regulating artificial intelligence systems to prevent harm to consumers was signed into law, the governor, attorney general and lawmakers are already vowing to revise the statute at the request of business leaders. 

Discussions about changing the law began earlier this month after state officials heard an outcry from about 200 prominent technology company executives and venture capitalists about Senate Bill 205. 

The plan to take another look at the law isn’t entirely surprising. Polis had reservations about the bill, but signed it anyway because he said there was time to change it before it went into effect in 2026. 

“I’m certainly encouraged by the fact that the beginning date for provisions are in 2026,” Gov. Jared Polis told reporters after the legislative session ended May 8. “I am confident that will leave ample time for any improvements that need to be made prior to it becoming effective.”

Changes to the law can’t be made by the legislature until the General Assembly reconvenes in January for the 2025 lawmaking term unless the governor or legislature calls a special session, which is highly unlikely. 

In a letter Thursday to “innovators, consumers, and all those interested in the AI space,” Polis, Attorney General Phil Weiser and Senate Majority Leader Robert Rodriguez, D-Denver, acknowledged that the recently passed legislation needed “additional clarity” and “improvements.” Rodriguez was one of the main sponsors of the bill.

“Starting today, in the lead up to the 2025 legislative session and well before the February 2026 deadline for implementation of the law, at the governor and legislative leadership’s direction, state and legislative leaders will engage in a process to revise the new law, and minimize unintended consequences associated with its implementation,” the letter says. 

Denver Mayor Mike Johnston added his signature after this story first published.

The letter goes on to spell out what parts the law must be addressed, including defining what “high-risk systems” are and focusing regulation on developers of those high-risk systems and not the smaller companies that use third-party AI software. (If a company were using something like ChatGPT and its developer OpenAI made changes, there is confusion about whether Colorado law would require the local company to reassess its compliance.)

Other “improvements” the governor, attorney general and lawmakers are promising to make include requiring enforcement by the attorney general to happen after the fact instead of “proactive disclosure,” and clarifying that consumers have a right to appeal only to the attorney general, though they would also bring up any discrimination matters to the Colorado Civil Rights Commission.

Tech leaders complained about the prohibitive language of the new law and how it was already putting a black eye on Colorado for companies looking to expand in the state. 

The letter from Polis, the attorney general and Rodriguez  addressed that reality, saying that since the law was signed “many of our home-grown businesses have highlighted the risk that an overly broad definition of AI, coupled with proactive disclosure requirements, could inadvertently impose prohibitively high costs on them, resulting in barriers to growth and product development, job losses and a diminished capacity to raise capital.”

Dan Caruso, head of Caruso Ventures and founding CEO of telecom Zayo Group, was one of 200 names on the letter to Polis from tech industry leaders. 

Caruso said he learned about the AI bill after it became law and only because he immediately heard from investors and tech companies confused about the ramifications to their businesses.

The way the law is written, he said, a grocery store that uses AI at the cash register to scan and add up merchandise could be subject to new reporting requirements even if they had nothing to do with the AI inside. 

But his other problem is that tech startups dabbling in AI may feel there’s an added administrative burden to developing technology in Colorado. 

“We certainly agree with the intent of trying to protect the consumer, but in the process you cut off a bunch of investment into Colorado and you’re going to be hurting all the consumers in Colorado because we need tech jobs. We need our innovation economy. That’s what makes us thrive,” Caruso said. “By rushing ahead on the AI bill without fully understanding the implications, we kind of put a lot of the innovation economy into jeopardy. So we needed to work with them to correct the broadness of certain provisions of the bill.”

Caruso said he and other tech leaders hope to participate in the process to revise the bill to prepare an amended version for the next legislative session.

“That letter is the first step of the process. Not the last step. We still have to get to the step where changes are made early next year,” Caruso said. “But we need to reassure investors that Colorado’s still is a great place to invest for innovation.”

Other notable names on the industry letter included Bryan Leach, CEO of the consumer app developer Ibotta; forme DaVita CEO Kent Thiry; Brad Feld, a venture capitalist  at The Foundry Group; and David Cohen, who cofounded and is CEO of Techstars, which he started with Feld and Polis.  

Rodriguez, who didn’t respond Friday to a request for comment, said during a legislative hearing on the measure that “all that we’re asking for companies to do (is put) in a place a notice to consumers, (perform) risk assessments on their tools and have an accountability report when something goes wrong that results in discrimination, that’s what this bill does.”

But AI developers opposed the bill from the start because there were concerns that even small changes at the development stage would discourage innovation by startups and AI-adjacent companies. Consumer advocates, however, felt the bill did not go far enough because AI-based discrimination was already occurring, with cases involving background checks and resume screening, and adjustments to auto insurance premiums.

The new letter from Polis and other elected officials was disappointing, said Matt Scherer, senior policy counsel for the Center for Democracy and Technology, a nonprofit that advances civil rights and liberties, said in an email on Friday. He said these changes were proposed before a taskforce that includes labor and consumer group representation has met. 

“Labor and consumer groups will strongly oppose those changes,” Scherer said. “The changes they are proposing would completely neuter the law, which is, of course, the objective of tech industry and other business pressure groups who have been spreading misinformation and fear-mongering about this bill ever since the sponsors made a few modest changes to strengthen what was a largely industry-crafted bill.”

Eric Maruyama, a spokesman for the governor’s office said in an email that “Gov. Polis is proud that Colorado is leading the way in the innovative sectors of tomorrow.”

“The governor is grateful for and shares Sen. Rodriguez’s commitment to ensuring that Coloradans are protected from bias and discrimination in AI and is focused on ensuring that state standards support consumers and Colorado’s innovation economy,”  Maruyama said. “Gov. Polis looks forward to working with leaders and stakeholders to help grow Colorado’s AI sector.”

Colorado Sun staff writer Jesse Paul contributed to this report.

This story has been updated to add additional comments.