What happened
On 14 May 2026, Colorado Governor Jared Polis signed Senate Bill 26-189, which fully repeals and replaces the 2024 Colorado AI Act (SB 24-205) forty-seven days before that law's 30 June 2026 enforcement date. The new ADMT Act: (1) drops the duty of reasonable care to prevent algorithmic discrimination; (2) eliminates mandatory impact assessments, risk management programmes, and annual AG reporting; (3) narrows scope from 'high-risk AI systems' to 'covered ADMT' that 'materially influences a consequential decision' in employment, housing, credit, healthcare, education, or government benefits; (4) retains pre-use consumer notice, 30-day post-adverse-outcome disclosure, data correction rights, and meaningful human review on request; (5) gives developers documentation obligations toward deployers; (6) vests enforcement exclusively in the Attorney General (no private right of action) with a 60-day cure period; (7) voids indemnification clauses shielding parties from liability for their own discriminatory ADMT use. Effective 1 January 2027.
Why it matters
Colorado's original 2024 AI Act was the highest-water mark for US state AI regulation; its replacement signals a broad US state retreat from proactive algorithmic-discrimination prevention toward reactive notice-based frameworks. The shift removes the most technically demanding compliance obligations (bias audits, impact assessments, duty of care) that had been driving multi-state compliance programmes. Organisations that built compliance programmes around SB 24-205 must reorient around the narrower ADMT framework. The new law is still the most operationally detailed US state AI law in force and will bind deployers in employment, credit, healthcare, and housing from 1 January 2027.
Action needed
Organisations must audit which ADMT tools 'materially influence' consequential decisions under the new narrower definition, implement pre-use consumer notices and post-adverse-outcome disclosure processes, establish human-review workflows, and update vendor/developer contracts to require technical documentation. AG rulemaking on disclosure requirements expected before 1 January 2027 — monitor for guidance.