As artificial intelligence’s influence grows, it’s no surprise to see lawmakers at every level jump to respond. That’s understandable. AI is one of the most transformative technologies of our time. Thousands of businesses across the U.S. are leveraging AI to transform sectors like education, disability access and health care. The AI boom is also boosting the economy. According to SAP, Colorado is among the top-10 states “most interested in AI jobs and AI business adoption,” with employers creating tens of thousands of AI-focused jobs.
The immense potential of AI makes effective regulation especially important. Unfortunately, Colorado’s Senate Bill 205, which passed a procedural hurdle in the state Senate earlier last week and out of a House committee during the weekend, takes a local approach to a complex national policy issue. By imposing new requirements on AI developers, SB-205 risks curbing innovation and hindering economic growth, both in Colorado and beyond.
Stay up to speed: Sign up for daily opinion in your inbox Monday-Friday
Kelly Kinnebrew, founder of the Boulder-based AI life-coaching platform Minerva, is just one example. In testimony last week, Kennebrew shared concerns about the bill with Colorado legislators. Those concerns center on the bill’s broad and unclear language. She wondered: “What is a high-risk (AI) system?” What does it take for businesses to comply with a requirement to eliminate “known or reasonably foreseeable” risks?
This uncertainty creates a dangerous guessing game for businesses, given the rapid pace of AI development. Get it wrong, and companies could find themselves on the wrong end of a costly lawsuit. Colorado’s business owners broadly share these concerns, with more than 100 signing on to a letter to the bill’s sponsor, which warned the legislation would “severely stifle innovation and impose untenable burdens.”
AI regulation at the state level would also create a patchwork of conflicting rules and regulations for businesses operating across state lines — as is true of essentially every AI company. That would mean Colorado companies would need to understand and comply with multiple sets of complex and potentially conflicting regulations. That complexity will magnify if other states adopt their own rules and laws. While navigating this minefield might be possible for big companies, a state-by-state approach creates huge compliance hurdles for small businesses and startups, which typically have limited resources.
If we want to encourage more AI innovators in Colorado, we need to remove roadblocks rather than add them. Of course, that doesn’t mean avoiding AI regulation. Regulations barring deepfakes that target individuals and protecting the integrity of our elections are important first steps. More broadly, businesses of all sizes could benefit from clear rules of the road, established at the federal level to apply uniformly across the United States.
Fortunately, that effort is already well underway. The Senate recently held a series of AI “Insight Forums” with leaders from industry and government. Legislators agree on the need for action to create clear guidelines and standards for how companies collect, use and share data. In fact, already-introduced federal AI legislation would provide much-needed clarity for businesses, while fostering trust among users of AI systems. Encouraging Colorado’s representatives in Washington to get that legislation across the finish line should be a top priority.
AI regulation must strike a balance between promoting innovation and protecting consumers from potential harm. Proposals like SB 205, though well-intentioned, make it harder for small businesses to innovate in AI. Ultimately, that means Americans will miss out on some of the transformative benefits AI has to offer. Rather than pushing ahead with this bill, Colorado leaders should advocate for federal-level AI regulation to truly help the state’s startups and small businesses thrive.
Doug Johnson is vice president of emerging technology policy at the Consumer Technology Association, the largest technology trade association in North America. He specializes in working with the world’s leading innovators — from startups to global brands — to shape innovation-friendly policy for AI at the local, national and international levels.