Colorado Emerges As Pioneer With Consumer AI Legislation

Scope and Applicability

The Colorado AI Act has a broad scope, encompassing both developers and deployers of AI systems within the state. Developers refer to entities conducting business in Colorado engaged in the development or substantial modification of AI systems. Deployers are defined as entities operating within Colorado that deploy high-risk AI systems. Additionally, the scope of the Colorado AI Act extends to interactions with AI systems that have a material legal or similarly significant effect on various aspects of consumers' lives, including education, employment, financial services, government services, health care, housing, insurance and legal services. Unlike some consumer privacy laws, the Colorado AI Act does not establish a minimum threshold of consumers for its applicability, meaning that entities of any size engaging in covered activities are included. The act applies to interactions involving AI systems that have a material legal or similarly significant effect on various aspects of consumers' lives, including education, employment, financial services, government services, health care, housing, insurance and legal services. The term "consumer" refers specifically to Colorado residents.