During the 2025 special session, the Colorado assembly considered making changes to the state’s unique artificial intelligence laws. As I’ve written about in prior blog posts, and in the Colorado Lawyer, Colorado’s law focuses on prohibiting discriminatory practices using AI or other algorithms in specific fields like insurance, housing, medicine, and law. Starting in 2026, it very generally requires testing and demonstration to the Colorado attorney general that the systems do not discriminate.
Why Interpretability Matters
I am generally a fan of this law because, whether you are worried about the effect of AI on marginalizing people today or you are worried about existential threats from misaligned AI agents, I strongly feel the road to safety lies in better understanding exactly how the AI is functioning internally (“thinking,” if you will, though I don’t like personifying models yet). Colorado’s bill, with it’s emphasis on testing and disclosure to the attorney general, strongly incentivizes this research into understanding how AI functions, known as “interpretability” research.
Industry Concerns and Proposed Revisions
The legislature was considering changes to the bill based on industry objections that it was too strict and would stifle innovation. News outlets reported some agreements between tech industry advocates and at least some legislatures, with several tweaks being provided, but public details on exactly what they wanted to do is scarce.
House Bill 25B-1009: Relief for Smaller Organizations
One bill that was actually introduced (though not passed) was HOUSE BILL 25B-1009, which gives some insight into the kind of things that the legislature was thinking about. It would have pushed the effective date of the bill back to 2027, exempted businesses with less than 250 employees or with less than $5 million in annual revenue, and local government in areas with fewer than 100,000 residents. This bill seems to reflect concern about the regulatory burden on smaller organizations.
House Bill 25B-1008: Expanding Enforcement Options
A different proposed revision was House Bill 25B-1008, which had a very different set of priorities. This bill sought to add provisions starting that a violation of the AI Act could also violate the Colorado Consumer Protection Act and the Anti-Discrimination Act. This would have had a the consequence of both expanding the scope of penalties for violation and, in the case of the Anti-Discrimination Act, possibly also allowed for a private right of action in a roundabout way. This bill seems to reflect concerns about enforcement issues on behalf of consumers.
The Outcome of the 2025 Session
Ultimately, neither of these versions were able to pass, though advocates say the debate will continue into next session. The version that was passed, Senate Bill 25B-004, simply pushed the compliance deadline from February 1, 2026, back to June 30, 2026. Thus, the only legal consequence at this time is a six-month delay on when AI systems have to comply with the law.
As these legislative debates continue, businesses operating in Colorado will need to keep a close eye on how compliance standards evolve. At Moriarty Underhill LLC, our Denver business attorneys are here to help companies navigate complex and fast-changing regulatory landscapes with practical, cost-effective legal strategies.