Lawmakers Tee Up Colorado AI Act for Scaling Back in Upcoming Legislative Session

In May 2024, Colorado enacted the nation’s most comprehensive law regulating the use of artificial intelligence (AI): Colorado Senate Bill 24-205 (the “Colorado AI Act” or the “Act”). Across the globe, the Colorado AI Act is second only to the European Union’s AI Act in breadth and, in fact, mirrors this EU law in many respects. Colorado’s law requires that Colorado businesses that use “high-risk” AI tools, including those used for employment decision-making, conduct risk assessments, provide notices, comply with data rights requests, and implement a risk management program, among other steps.

Contemporaneously with signing the Colorado AI Act into law, Democratic Governor Jared Polis expressed reservations about the Act in a letter to the Democratic-controlled General Assembly. Polis urged lawmakers to amend the Act before its February 1, 2026 effective date to simplify the “complex compliance regime” imposed on “all developers and deployers doing business in Colorado.” Heeding the governor’s call, lawmakers tried, but failed, to pass amendments to the Act before the 2024-25 legislative session ended. As a result, Colorado employers had only eight months before the law’s effective date of February 1, 2026 to unravel the Act’s “complex compliance regime.”

On August 28, 2025, Colorado employers received a reprieve. With a looming $1 billion budget shortfall in 2026, Polis convened a special legislative session, which commenced on August 21, 2025. While budgetary matters were the special session’s primary focus, amending the Colorado AI Act also was on the agenda. Notably, during the fifteen months since the Act’s passage, the momentum for regulating AI has faded, especially after the Trump Administration issued its Executive Order entitled, “Removing Barriers to American Leadership in Artificial Intelligence”, on January 23, 2025. Consistent with this change in the winds, Colorado lawmakers proposed several bills to scale back the Colorado AI Act.

Short on time in the six-day special session, Colorado lawmakers ultimately agreed only to extend all of the Act’s compliance deadlines from February 1, 2026 to June 30, 2026. This extension should provide sufficient time for a significant overhaul of the Colorado AI Act in the upcoming, regular legislative session. Such an overhaul seems likely as all the bills proposed in the special session to amend the Colorado AI Act would have substantially pared it down.

Against this backdrop, Colorado employers should consider taking a “wait-and-see” approach towards compliance with the Colorado AI Act. Given the likelihood that the Act’s most onerous requirements will be scaled back, it would be prudent to watch for legislative developments before undertaking any significant steps to comply with the Act’s current requirements. Employers anxious to take some steps, or who are subject to other AI laws, such as the EU AI Act, may want to execute on some action items, such as the following:

• conducting and documenting pre-adoption due diligence;
• inventorying the organization’s current use of AI tools in the employment context to gain a better understanding of how those tools are used; and
• considering how to be sufficiently transparent about the organization’s use of AI.

With Colorado lawmakers and the governor now focused on the new, impending deadline, Colorado employers should have sufficient time to take any required compliance steps promptly after a bill amending, or completely replacing, the Colorado AI Act, is signed into law.