Source: JD Supra

On May 14, 2026, Colorado Governor Jared Polis signed into law SB 26-189, which repeals the 2024 Colorado Artificial Intelligence Act and goes into effect on January 1, 2027. Unlike the prior Colorado AI Act that regulated all “high risk” AI systems, the new law applies only to automated decision-making technologies (ADMTs) that materially influence consequential decisions. The law defines consequential decisions to include sectors such as education, employment, real estate transactions, financial and lending services, insurance, health care, and essential government services and benefits.

The new statute requires deployers to disclose the use of ADMTs to consumers before use and, in case of an adverse outcome, to provide an explanation of the ADMT’s role along with an opportunity for meaningful human review. Developers must provide deployers with documentation concerning intended and harmful uses, limitations and risks, data used in training, instructions for use and monitoring, and updates. The law specifies that existing Colorado anti-discrimination laws apply to consequential decisions influenced by ADMTs. It excludes “low stakes” decisions and technologies used for cybersecurity, system reliability, sanctions or anti-money laundering compliance, and fraud prevention. Liability is allocated according to the relative fault of developers and deployers, and contractual indemnity clauses cannot be used to evade responsibility. Enforcement is vested exclusively with the Colorado Attorney General, who treats violations as unfair trade practices.