Colorado’s New AI Bias Law Puts Trade Secret Management at Risk

Colorado has enacted an overhaul of regulations targeting bias in artificial intelligence, signed into law last month. The new law replaces a previous broad duty for AI developers to avoid algorithmic bias with more modest disclosure requirements. However, the legislation does not clarify whether trade secret protections could limit the scope of these disclosures.

The original regulation required developers to take proactive measures to prevent bias in their AI systems. The revised law shifts the emphasis toward transparency, mandating that companies disclose certain information about their algorithms. The trade secret issue remains unresolved: developers might claim that the inner workings of their algorithms are proprietary, potentially undermining the disclosure requirements.

Legal experts note that the ambiguity could create challenges for enforcement. If companies invoke trade secret protections, regulators may struggle to verify compliance with anti-bias standards. The outcome of this trade secret question could influence how other jurisdictions craft their own AI bias laws.