Colorado’s Artificial Intelligence Law: From Imminent Compliance to Continued Uncertainty

Bayan Biazar, Associate

Campbell Litigation has been tracking the status of Colorado’s artificial intelligence (“AI”) law, Senate Bill 24-205 (“SB24-205”), which has undergone substantial changes since its enactment in 2024.[1] What began as one of the country’s first comprehensive AI anti-discrimination frameworks, imposing broad obligations on both AI developers and employers, has since faced implementation delays, proposed legislative rewrites, and now pending litigation that has temporarily halted enforcement of the law.[2] As discussed in prior analysis, SB24-205 generated significant concern among employers and technology companies because of its expansive compliance obligations, particularly those tied to risk assessments, bias mitigation, and transparency requirements in AI employment-related decision-making.[3]

Delays and Legislative Revisions

As the original effective date of February 1, 2026 approached, SB24-205 became the subject of increasing scrutiny from business groups, technology companies, and employers concerned about the breadth and practical application of the law. Questions centered on the statute’s compliance obligations, the scope of covered AI systems, and the feasibility of implementing bias auditing requirements across industries. During 2025, lawmakers and stakeholders attempted to revise the law through negotiations and proposed amendments.[4] Although broader reform efforts stalled, Colorado ultimately delayed implementation of SB24-205 from February 1, 2026 to June 30, 2026.[5] The delay was intended to provide additional time for legislators and stakeholders to revisit the framework before enforcement began.

The March 2026 Rewrite Proposal

            In March 2026, the Colorado AI Policy Working Group introduced a substantially revised framework intended to replace significant portions of SB24-205.[6] Rather than maintaining the existing structure centered on detailed bias auditing and risk management obligations, the proposed rewrite moved toward a more disclosure- and transparency-based framework. The proposal would have reduced or eliminated several of the compliance obligations that had generated concern among employers and developers, while still requiring entities to provide notice regarding the use of AI systems in consequential decision-making contexts.[7] The March proposal also sought to further delay implementation of the law, potentially pushing the effective date to January 1, 2027.[8]

Litigation and Temporary Halt on Enforcement

            Shortly before the anticipated June 30, 2026 effective date, litigation was filed challenging SB24-205.[9] The litigation is aimed at challenging core portions of SB24-205, including requirements tied to algorithmic discrimination, disparate impact considerations, and obligations imposed on developers and deployers operating across jurisdictions. The plaintiffs also challenge the breadth and clarity of the law’s compliance framework.

            The United States District Court for the District of Colorado subsequently stayed proceedings while the Colorado General Assembly considers potential revisions to SB24-205. In a joint filing submitted by the parties, the Colorado Attorney General represented that the State does not intend to promulgate rules implementing SB24-205, or enforce the law, until after the legislative session concludes and any resulting rulemaking process is completed.[10] As a result, although SB24-205 remains scheduled to take effect on June 30, 2026, enforcement of the law has effectively been paused pending further legislative and judicial developments.

Key Takeaways

            For now, there is no current enforcement risk tied to SB24-205 due to the ongoing litigation and temporary halt on enforcement. Although the future of SB24-205 remains uncertain following implementation delays, proposed rewrites, and pending litigation, Colorado’s efforts continue to shape the broader national conversation surrounding AI governance and algorithmic discrimination.

[1] See https://leg.colorado.gov/bill_files/47770/download for the 2024 version of SB24-205; see also  https://www.rockymountainemployersblog.com/blog/2025/8/28/colorados-artificial-intelligence-ai-law-reform-could-apply-discrimination-liability-on-ai-developers and https://www.rockymountainemployersblog.com/blog/2025/12/5/new-ai-compliance-requirements-prohibit-discrimination-for-colorado-employers for prior Rocky Mountain Employer Blogs discussing SB24-205.

[2] Id.

[3] Id.

[4] See https://leg.colorado.gov/bill_files/40405/download for the proposed amendments to SB24-205.

[5] The decision to delay SB24-205’s implementation was made at a special legislative session called by Govern Polis in August of 2025. 

[6] See https://drive.google.com/file/d/1L2plsS3q1vzCrI8LuHj-5SNFjAoYoA_d/view?pli=1 for the Colorado AI Policy Working Group’s proposed changes.

[7] Id.

[8] Id. at p. 13.

[9] See X.AI LLC v. Weiser, No. 1:26-cv-01515 (D. Colo. filed Apr. 9, 2026).

[10] See https://www.troutmanprivacy.com/wp-content/uploads/sites/941/2026/04/US_DIS_COD_1_26cv1515_Joint_MOTION_to_Vacate_Scheduling_Conference_and_S.pdf.