Absent any major federal legislation, leadership, or policy, states are more actively trying to regulate a technology that some fear encroaches on many aspects of our lives. On May 17, Colorado became the first state to pass a comprehensive law regulating artificial intelligence, focusing on algorithmic discrimination.

The White House Blueprint for an AI Bill of Rights warned that technology, data, and automated systems benefit but also threaten the public, and that algorithmic discrimination occurs when “automated systems contribute to unjustified different treatment or impacts disfavoring people based on their race, color, ethnicity, sex … religion, age, national origin, disability, veteran status, genetic information, or any other classification protected by law.”

While some argue that various civil rights laws contain relevant discrimination protection, AI and other new technologies may be particularly susceptible to misuse. There is no consistent effort in Congress indicating the US will be prepared to prevent or address it—or even to anticipate the risks these technologies pose.

Colorado took an inclusive approach to passing the new law, effective Feb. 1, 2026. State lawmakers heavily collaborated with tech companies, civil rights organizations, academics, and other policymakers to develop a set of rules.

Elsewhere this year, 633 AI-related bills were introduced in 45 states, and 111 in Congress. Fifty-one state bills were enacted into law. But all except Colorado’s AI Act regulate AI in very specific instances. For example:

• Deepfake political advertisements (regulated in 16 states)
• Labor and employment discrimination (New York City’s Local Law 144 and automated employment decision tools; Illinois’ Artificial Intelligence Video Interview Act)
• Performers’ right of publicity in their digital appearance and voice (Tennessee’s sweeping ELVIS Act, effective July 1)
• Deepfake sexual content (regulated in 20 states)
• Generative AI in consumer protection (Utah’s Artificial Intelligence Policy Act, effective May 1)
• Facial recognition in law enforcement (Maryland law, effective Oct 1)

Meanwhile, the Federal Trade Commission, the most active federal agency in AI, but limited to enforcing antitrust and consumer protection laws, initiated the first facial recognition enforcement this spring, and recently issued 6(b) inquiries to generative AI companies.

Gov. Jared Polis (D-CO)’s signing statement frames the Colorado AI Act as an urgent plea to federal lawmakers rather than a proud moment for local politicians, echoing many popular anxieties.

Without federal AI regulation, states have to step up. But a patchwork of local laws won’t provide consistent protections—and it would be difficult for companies and developers to parse, track, and comply. It’s also unlikely that individual states will have the money, infrastructure, logistical capacity, or even legal authority to enforce their laws effectively.

State politicians may also be less interested in the broader, indirect effects and implications of AI regulation. The tech, public policy, and financial sectors are concerned about state AI laws—and the failure to formulate a national AI policy—both of which could stifle innovation, investment, and competition.

This work can only be done at the top. The European Council formally adopted the EU AI Act, the world’s first legal framework, on May 21. While leaving implementation up to individual member states, the EU created a centralized AI office to support compliance. Hopefully Colorado’s law and its collaborative model will help motivate the US to follow suit to fast-track unified AI legislation and governance.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Anuj Gupta is managing partner of First Gen Law, with focuses on matters in technology and entertainment.

Rebecca Neipris is senior attorney at First Gen Law, focusing on entertainment and intellectual property.

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