What's Happening?
Colorado has enacted a new law, SB 26-189, aimed at addressing bias in artificial intelligence (AI) by imposing disclosure requirements on automated decision-making technologies (ADMT). This law replaces a previous 2024 mandate that broadly targeted AI algorithmic
bias in consequential decisions. The new regulation requires developers and deployers of ADMTs to disclose information about their technologies, including intended uses and known limitations, to ensure transparency. These disclosures are enforced by the state attorney general and are subject to Colorado's Anti-Discrimination Law. The law applies to significant decisions in areas such as education, employment, and healthcare, with certain exclusions. Developers must provide detailed information to deployers, who in turn must inform consumers about the use of ADMTs, especially in cases of adverse outcomes.
Why It's Important?
The new law represents a significant shift in how AI technologies are regulated, emphasizing transparency over broad anti-bias mandates. This approach could impact how companies manage trade secrets, as developers are required to disclose more information to deployers than deployers must to consumers. The law's focus on transparency aims to prevent discriminatory outcomes and ensure that consumers are informed about the technologies affecting their lives. However, it also raises concerns about the protection of trade secrets, as developers have limited ability to withhold information. This could lead to increased legal and compliance challenges for companies using ADMTs, as they must balance transparency with the protection of proprietary information.
What's Next?
Companies involved in the development and deployment of ADMTs will need to review their compliance strategies to align with the new law. This includes ensuring that their disclosures are comprehensive and protect trade secrets where possible. Organizations may also need to update their agreements and risk assessments to reflect the new requirements. As the law is implemented, further regulations may refine disclosure requirements, and companies will need to stay informed to maintain compliance. The law's impact on trade secret management could lead to broader discussions about balancing transparency and innovation in AI technologies.
