Be Prepared: Understanding AI Legislation is Key for Women BusinessOwnersCase Example: Colorado – By Antionette Ball
In today’s rapidly evolving business landscape, integrating Artificial Intelligence (AI) into your business operations is not just a competitive advantage, it’s a necessity. AI provides you with the tools that can help you streamline processes, enhance customer experiences, and drive innovation. However, as you do so, it is important to stay informed about legislative developments, including what recently happened in Colorado.
Colorado is blazing a trail as the first state in the US to roll out comprehensive legislation regulating the use of artificial intelligence (AI) in key sectors such as employment, healthcare, and housing. Starting February 2026, businesses will be required to disclose their AI usage and ensure they protect citizens from “algorithmic discrimination”.
In layman terms, “Algorithmic Discrimination” occurs when AI systems produce biased outcomes that unfairly disadvantage certain groups of people based on characteristics such as race, gender, age, or socioeconomic status.
Basically, if the data used to train the AI system reflects historical biases or prejudices, the AI is likely to replicate and even amplify these biases in its predictions and decisions. The way an algorithm is designed can inadvertently introduce biases, particularly if the design process does not account for potential discrimination.
In Colorado, Governor Jared Polis, signed Senate Bill 24-205 (SB205) on May 17, 2024, which targets “high-risk artificial intelligence systems”—those that play a critical role in decisions within education, financial services, employment, healthcare, housing, and legal services. These systems are flagged as high-risk if they could potentially lead to differential treatment based on protected classifications such as age, disability, race, religion, or sex.
Colorado’s forward-thinking legislation represents a significant shift in how states are approaching the regulation of AI. For businesses, it’s a call to adapt and innovate responsibly, ensuring that AI technologies are used ethically and transparently.
For AI developers, the new law (SB205) mandates transparency and requires companies to disclose all known risks of algorithmic discrimination to the Colorado attorney general and publish a detailed public statement on their websites about their AI systems and risk management strategies. Also, deployers, or businesses using these AI systems, are required to implement comprehensive risk management policies, conduct regular reviews of their AI systems, and notify the attorney general of any discriminatory outcomes.
Although, the legislation has its supporters, it also faces criticism from the tech industry. Tech companies and industry groups argue that state-specific regulations could stifle innovation and impose the most sweeping statewide restrictions on the use of artificial intelligence in the private sector. With over 40 states, including California, contemplating around 400 AI-related bills, the outcome of Colorado’s legislative efforts could set a precedent.
In conclusion, staying informed about AI regulations is crucial for positioning your business for success. As AI technologies advance, regulations are continually updated to address emerging ethical, privacy, and security concerns. Therefore, keeping informed is not just a legal necessity but a strategic business advantage.
