Dive Brief:
- xAI filed a lawsuit Thursday attempting to block enforcement of a Colorado law that would prohibit algorithmic discrimination by entities deploying artificial intelligence systems, alleging that the law violates several components of the U.S. Constitution.
- Specifically, the SpaceX subsidiary claimed in x.AI LLC v. Weiser that Senate Bill 24-205 — passed in 2024 and set to take effect as amended on June 30 — violates the First Amendment guarantee of free speech, the commerce clause of Article I and the due process and equal protection clauses of the 14th Amendment. xAI alleged that the law is “an effort to embed the State’s preferred views into the very fabric of AI systems.”
- The company asked the U.S. District Court for the District of Colorado to permanently enjoin the state from enforcing the SB 24-205. The office of Colorado Attorney General Philip Weiser, named as the defendant in the complaint, declined to comment.
Dive Insight:
Colorado’s embattled AI law faced uncertainty long before the xAI lawsuit. Despite approving SB 24-205, Gov. Jared Polis nonetheless stated concerns that the law could hamper the state’s AI industry and called on local leaders to ensure the law’s provisions did not affect development of beneficial AI technologies.
SB 24-205 originally was set to take effect at the beginning of February 2026, but state legislators and Polis greenlit an amendment extending the deadline by several months. The state also launched an AI Policy Work Group to study further amendments, which culminated in an announcement last month on a new AI policy framework whose provisions would need to be taken up by legislators.
In its complaint, xAI called SB 24-205 “controversial and legally suspect,” noting that the state’s legislature has only a few weeks remaining in the current legislative session before its adjournment to amend the law. The company also incorporated statements from officials including Weiser, who previously called the law “problematic” and in need of fixes.
xAI took particular issue with the law’s “algorithmic discrimination” prohibition. The company alleged that, although the state purported to address unlawful differential treatment or impacts disfavoring individuals or groups, it excluded from this definition any AI system outputs that expand the diversity of job applicant, customer or participant pools or redress historical discrimination.
The law’s “provisions prohibit developers of AI systems from producing speech that the State of Colorado dislikes, while compelling them to conform their speech to a State-enforced orthodoxy on controversial topics of great public concern,” xAI claimed. “This attempted coercion is unconstitutional under the First Amendment.”
xAI also alleged that the law is unconstitutionally vague and would burden interstate commerce by regulating development and deployment of AI systems outside of Colorado. It noted that President Donald Trump’s December 2025 executive order challenging state-level AI regulations directly criticized Colorado’s law as an example of state attempts to embed ideological bias within AI models.
Colorado is one of a small but growing number of states seeking to regulate AI in hiring. Laws targeting discriminatory AI use in Illinois and Texas took effect at the beginning of 2026, while two California regulatory agencies have issued similar requirements for some employers that deploy AI systems.
