Colorado Continues to Iron Out Rules for ADMT Systems

Colorado’s new AI rules have been through a long procedural process. Colorado passed an AI law in 2024, which faced unpopularity and an injunction. The legislature then reworked and replaced it with a new legal structure consisting of several AI laws. These include the Automated Decision-Making Technology Act (ADMT Act) and the Chatbot Safety Act (Chatbot Act). Now, the state is working to get regulations ready for the laws’ January 1, 2027, effective date. Some big questions remain unanswered, and a recent hearing of the Colorado Department of Law drew those issues to the surface. A major ambiguity relates to the scope of the Colorado ADMT Act. The ADMT Act regulates automated decision-making technology that “materially influences” a consequential decision. The problem is, no one knows exactly what “materially influences” means. A recent Wiley memo discusses the ambiguity, stating:

“The Definition of ‘Materially Influence’ Remains Contested. Stakeholders differed on when ADMT ‘materially influences’ a consequential decision, particularly when an automated output and independent human review produce the same result. Some urged the Department to base the standard on reliance on ADMT and its independence from human oversight, rather than treating an ADMT output alone as evidence of material influence. Others supported the Proposed Rules’ current presumptive approach for certain types of ADMT outputs. Commenters also requested clarification on the evidence needed to demonstrate independent human decision-making such that the ADMT output is not a material influence.”

The road to normalized AI regulation will involve answering many questions like this one. The nuances of this determination could have wide-ranging influence for AI deployers in the state. If given the choice, most entities in Colorado will opt not to be covered by the ADMT. This means that lawmakers must juggle competing interests in ensuring the law is robust enough to cover the intended behavior, without being overly broad and cumbersome for the edge cases. We’ll see what approach Colorado adopts in the final rules.