Colorado’s Artificial Intelligence Act is another push for urgent federal legislation

In the absence of any major federal legislation, leadership or policy, states are more actively trying to regulate technology that some say has the potential to creep into many aspects of our lives. On May 17, Colorado became the first state to pass a comprehensive AI regulation bill focusing on algorithmic discrimination.

The White House draft for an AI Bill of Rights warned that technology, data and automated systems benefit but also threaten society, and that algorithmic discrimination occurs when “automated systems result in unreasonable different treatment or influence disadvantageous people based on their race, color, ethnic origin, sex… religion, age, national origin, disability, veteran status, genetic information or any other classification protected by law.”

While some argue that various civil rights laws provide adequate protection against discrimination, artificial intelligence and other new technologies may be particularly susceptible to misuse. There is no consistent effort by Congress to indicate that the United States will be prepared to prevent or address this problem, or even to anticipate the risks these technologies pose.

Colorado took an inclusive approach by passing a new law that went into effect on February 1, 2026. State lawmakers worked closely with technology companies, civil rights organizations, scientists and other policymakers to develop the set of rules.

This year, 633 AI-related bills have been introduced in other states in 45 states, and 111 in Congress. Fifty-one state bills have become law. However, all but Colorado’s Artificial Intelligence Act regulate AI in very specific cases. For example:

• False political advertising (regulated in 16 states)
• Discrimination in Labor and Employment (New York City Local Law 144 and Automated Employment Decision Tools).; Illinois Artificial Intelligence Video Interview Act)
• The right of performers to advertise their digital appearance and voice (Tennessee General ELVIS law, effective July 1)
• Deepfake sexual content (regulated in 20 states)
• Generative AI for Consumer Protection (Utah Artificial Intelligence Policy Act, effective May 1)
• Facial recognition in law enforcement (Maryland law, effective October 1)

Meanwhile, the Federal Trade Commission, the most active federal agency on artificial intelligence limited to antitrust and consumer protection enforcement, initiated its first facial recognition enforcement this spring and recently issued 6(b) inquiries to companies engaged in generational artificial intelligence.

In a statement signed by Governor Jared Polis (D-CO), the Colorado AI Act is an urgent appeal to federal lawmakers, not a proud moment for local politicians, reflecting many common concerns.

Without federal regulation of AI, states must step up. However, a patchwork of local regulations will not provide consistent protection, and it would be difficult for companies and developers to analyze, track and comply with the regulations. Individual states are also unlikely to have the money, infrastructure, logistical capacity, or even legal authority to effectively enforce their laws.

Government policymakers may also be less concerned about the broader, indirect effects and implications of AI regulation. The technology, public and financial sectors are concerned about state AI regulations and the lack of formulation of a national AI policy, which could stifle innovation, investment and competition.

This work can only be done at the top. On May 21, the European Council formally adopted the EU Artificial Intelligence Law, the world’s first legal framework. Leaving implementation to individual member states, the EU has created a centralized AI office to support compliance. We hope that Colorado’s law and its collaborative model will help motivate the United States to follow suit and accelerate unified AI legislation and governance.

This article does not necessarily reflect the opinions of Bloomberg Industry Group, Inc., publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Information about the author

Anuj Gupta is the managing partner of First Gen Law, specializing in technology and entertainment matters.

Rebecca Neipris is a senior attorney at First Gen Law, specializing in entertainment and intellectual property.

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