Inside the Lobbying Blitz Over Colorado's AI Law

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Last year, Colorado signed a first-of-its-kind artificial intelligence measure into law. The Colorado AI Act would require developers of high-risk AI systems to take reasonable steps to prevent harms to consumers, such as algorithmic discrimination, including by conducting impact assessments on their tools.

But last week, the state kicked off a special session where lawmakers held frenzied negotiations over whether to expand or dilute its protections. The chapter unfolded amid fierce lobbying by industry groups and consumer advocates. Ultimately, the state legislature punted on amending the law but agreed to delay its implementation from February to June of next year. The move likely tees up another round of contentious talks over one of the nation’s most sprawling AI statues.

This week, I spoke to two local reporters who have been closely tracking the saga for the Colorado Sun: political reporter and editor Jesse Paul and politics and policy reporter Taylor Dolven.

What follows is a lightly edited transcript of the discussion.

Cristiano Lima-Strong:

Jesse, Taylor, thank you both so much for joining us. So as I understand it, the state kicked off this brief special session last week primarily to deal with budgetary questions. Why did the Colorado AI Act get rolled into this?

Jesse Paul:

Well, it might've felt brief to you, Cristiano, but to us it was a long six days. Normally special legislative sessions in Colorado are three days and things are kind of pre-planned at the beginning, but this one kind of dragged on in particular because of the AI situation in the state. And basically the reason why the governor folded this into the larger budget discussion that the legislature was happening had to do with the fact that this AI law had been passed in 2024. There was kind of an understanding that things would be changed in the regular legislative session in Colorado this year, so that was January to May.

But when lawmakers took it up, they just really couldn't reach an agreement and the efforts to change it failed as did kind of this last-minute Parliamentary procedural work around to delay the implementation of the law. So we all kind of expected this special session to happen from the perspective of we knew that the One Big Beautiful Bill Act is probably going to pass. We knew that it was going to have an effect on state finances. And so I think one of the reasons they didn't get this done was kind of in anticipation like, "Hey, we can punt this to a special session that was coming." And so not a big surprise to us in Colorado that this was added to the agenda.

Cristiano Lima-Strong:

So they're punting the punt now, but we'll circle back on that a little bit. You alluded to Governor Jared Polis asking them to take this up. How surprising was that at the time that this was sort of being taken back up as an issue after the law had passed?

Taylor Dolven:

He had said all summer that whenever we would ask him about the budget issues and how the state was going to cope with that, we would always ask about AI and he would say that this was likely going to be taken up. So we weren't surprised when he announced that this was all rolled into one mandate for the special session. It was very predictable.

Jesse Paul:

And not only that, but lawmakers were expecting the governor to find some possible way to call a special session to wrap AI into it. He said he wasn't going to do just a specific AI special session, but lawmakers were pretty suspicious that he was just going to find some excuse to call them back to tick up this issue.

Cristiano Lima-Strong:

So many consider this the first comprehensive AI regulation passed at the state level in the US. The tech industry, of course, has been averse to regulation, I think it's fair to say at the state and federal level. And so I was curious about the governor asking to this be taken up. What's been his relationship historically with the tech industry and business interests and how did you all view sort of him calling this back as a matter retaken up?

Jesse Paul:

Well, for those who don't know, Colorado's governor, Jared Polis, his start in business and life was really around the tech bubble. He started or worked on two successful businesses, one that had to do with delivering flowers and the other one had to do with greeting cards, online greeting cards. When I was in high school, that was a cool thing that my grandmother said to me. And those were sold by him for hundreds of millions of dollars.

He's used his personal wealth to basically propel his entire political career. So he's got a lot of connection to the tech sector. He knows folks in it. He feels close to it. He's always kind of considered himself a business-minded politician, specifically related to tech. And so when people started complaining about this law in 2024 that was coming, he was very sympathetic to the concerns that came out and I think is and was and will be considered kind of an ally of the tech industry in trying to, in terms of trying to get this shaped in a way that's palatable for them.

Cristiano Lima-Strong:

The special session kicks off. You all had written in one of your stories that the negotiations had quote "rocked the capitol" with quote, "Shouting at times, filling the halls outside of the house and Senate." Before we get into some of the nitty-gritty, could you paint the picture a little bit? What was it like as it unfolded on the ground?

Taylor Dolven:

As someone who's new to covering the legislature, it was pretty shocking to me. I'm sure Jesse would say it was more run-of-the-mill. But the lobby was just completely filled with people whispering to shouting, to running around, and really just staring into both chambers pretty constantly over the course of the special session. They made their presence known. They were very active. And I've run the numbers on the data we have so far from our Secretary of State's numbers and data, and it looks like there are 127 different groups that paid lobbyists to sway lawmakers, and a lot of them are from the tech industry and from the healthcare industry. So we know that for sure.

Jesse Paul:

The interesting thing about this bill from the lobby perspective was that AI is so ubiquitous now. It's in a lot of places that I don't think we even realize it is. And so all of these different industries had people, had paid lobbyists, high-powered folks that were there. Every big lobbyist in Colorado seemed to have a client on this, and they all had different things that they wanted out of the bill. And that was unusual for a piece of regulation like this. Normally there's some cliques that kind of form or coalitions, but it felt like no one was kind of on the same page, and that's kind of what led to everything falling apart.

Cristiano Lima-Strong:

Had you seen anything like this before, Jesse? How would you compare it to sort of other sessions or cycles or big sort of lobbying battles you've seen?

Jesse Paul:

I think in terms of the number of lobbyists, it wasn't eye-popping or anything like that, but I think the feelings toward it were particularly sour. Right? We've had really difficult conversations in Colorado about guns, about oil and gas regulations, about healthcare. Things that have drawn people out of the woodwork have made for big lobbying bills have resulted in people getting a lot of money for lobbying.

This one was different in that it felt really personal to all these different companies. And again, you had these folks like Google and Verizon and PayPal and Amazon, and they all had people at the Capitol and they were struggling to kind of get their leaders’ input. And there was definitely that pressure knowing that this is a national, this law kind of has national significance. I think that just kind of turned up the heat on everything.

Cristiano Lima-Strong:

So talk to us a little bit about why is this such a significant law, why do people care so much about it? I alluded to people's viewing it as the first comprehensive law. Why so much attention in Colorado from all these massive corporations and all these interests?

Taylor Dolven:

I think these companies are really, you mentioned Cristiano that this was the first in the nation rule, and so I think these companies are really concerned about precedent setting because we don't have federal regulation. I think there's a lot of focus on Colorado and how this law is going to shake out because, yeah, because of the vacuum at the top.

Jesse Paul:

And I think you have to look at it kind of similarly to how California sets national car regulations and car standards, right? Once an organization or a car company for instance, has to adhere to something that California put in place, those regulations, because California's economy is so big, have to go everywhere across the country.

Colorado doesn't have the biggest economy. It doesn't have the biggest population, but if a company like Google or Verizon has to adhere to laws or rules in Colorado, from a tech standpoint, they're going to have to probably apply that elsewhere. And we all know, if you cover a state legislature you know that it's frequent that everybody kind of steals from each other. So if Colorado has some regulations at work, they crop up very quickly in Washington or Oregon. New Mexico pulls on them, and then maybe they make their way to California state, like that. And so things just snowballed. Every legislature kind of wants somebody else to go first on a big policy like this.

Cristiano Lima-Strong:

Yeah, it's interesting. A few years ago, of course, California passed this landmark data privacy law. That's been one of the big debates in tech policy circles for years. And there was a question of is this going to become the standard. That hasn't really borne out. It's another standard that has, mainly because they're more friendly to tech companies. In Virginia and other states that has kind of been modeled.

So perhaps industry sees this now as a template and is thinking of and other groups trying to shape that. But okay, so digging some of the specifics, there were a couple of different bills y'all reported on that were sort of vehicles for amending this, SB4, HB-1008. Hope I got those right. Talk us through some of the proposals that were out there and sort of top lines on what they would've done, who was for, who was against and all that.

Jesse Paul:

So Senate Bill 4 was brought by Senate majority leader Robert Rodriguez, who was kind of the guy who shepherded in the original law. And what it would've done was basically just dial back that original law a little bit, take away some of the reporting requirements, shift some of the regulatory burden from so-called developers, deployers and then also change some of the liability aspects in terms of joint several liability, which ended up kind of being a hot button thing and probably derailed everything.

The other bill, House Bill 1008 was brought by a bipartisan group of lawmakers started over in the house. And it was seen as being backed by so-called little tech companies in Colorado, some VC folks, some small tech players. I bought, I was one of them. And then the governor's office was also kind of seen as being behind that. And basically that would've just eliminated a lot of the regulations that were in the underlying law and placed the rules around AI usage under kind of existing consumer protection laws in Colorado.

So the Colorado Anti-Discrimination Act and then the Colorado Consumer Protection Act, and then additionally would've narrowed what the definition of AI was. And so these were meant to kind of be foils to each other. And I think everyone kind of knew that because of who Robert Rodriguez is, he controls the Senate. He's like the Chuck Schumer, if he was the Senate majority leader of Colorado. And so a lot of things had to go through him. Basically, his bill was going to be the one that went through. And ultimately we did see that. And the other opposing foil bill kind of floundered very quickly.

Cristiano Lima-Strong:

But so SB4, even that, that was making some concessions trying to make compromises to address some of the concerns that we'd heard from industry and business groups. Is that right?

Taylor Dolven:

Yeah. But it became apparent really quickly that once that bill really started going through the process that tech companies really preferred the original bill. We kept hearing from people like, "We just want a delay on the original bill. We don't want any of these changes anymore." So that was an interesting dynamic given that a lot of the reason that we were even back debating AI was because of those companies in the first place. And then they ended up really just advocating for a delay in the original bill.

Jesse Paul:

They thought Senate Bill 4, if it had passed, was actually going to be worse than the underlying law.

Cristiano Lima-Strong:

That's interesting. And so you all had reported over the weekend that there had been perhaps a tentative agreement, there was a framework. It sounds like it wasn't, still hasn't been released or we haven't seen. But that ultimately fell apart. What do we know about that sort of burgeoning agreement and why it unraveled?

Jesse Paul:

At about 10 o'clock or so Sunday night, it appeared that they had kind of reached this deal among consumer protection groups, unions, which have been really heavily involved in this conversation, Colorado, and then the so-called small tech companies. The big tech folks said that they were left out of the room and were really upset with this agreement. But basically, it was just tweaks to that Senate Bill 4 to make it more palatable. Changes around the liability aspects, and then also dialing back some of the definitions about what constitutes a so-called, I think the word that they were using was a consequential decision.

Things like schools and jobs and bank loans. Kind of trying to narrow that a little bit to make it less complicated. But the thing that was kind of holding all this up, and I think this was really interesting, was this complaint from the tech companies that kept saying, "Look, you're asking us to talk to folks or disclose how this technology works and how these machines are making decisions. And the whole point of AI in large part is that it changes, it adapts, and the AI makes up how, decides how things get changed internally and how those decisions get made." And so I think there was confusion among lawmakers about how the technology actually works. They weren't really willing to believe the tech companies in this, wanted them to have some kind of answers for it. And so this deal was very short-lived.

Taylor Dolven:

There was also a lot of confusion about which agencies in state government use AI and how. Rodriguez didn't even seem, the sponsor of Senate Bill 4, didn't really even seem to have a complete grasp on how much AI is embedded in all these agencies and what its impacts are. So that, that's another reason for him ultimately flipping and advocating for the delay, was he didn't understand this fully in the end.

Cristiano Lima-Strong:

You all referenced little tech a little bit. There's a lot of talk about little tech in Washington at the moment and in the Trump administration. I was a little curious about what companies or groups you've seen popping up. We've heard little tech concerns in Washington, but there's also been instances where some trade associations that were reporting to represent little tech and small businesses ended up sort of being revealed to be primarily funded by some of the larger companies. So just curious about the different spectrum of voices you all were seeing activate on this.

Taylor Dolven:

I've gone through all the lobbying reports and nothing stands out to me completely as little tech. The heavy hitters are obvious, like Intuit was there, Salesforce was there, Airbnb was there. But there are also some groups that we're representing just like Colorado Business, so like Colorado Chamber of Commerce, Boulders Chamber of Commerce, Denvers, really trying to get the point across of these companies are here big and small, and we need to protect them and protect innovation and protect jobs. And an interesting point that came up a lot from progressives was the question of, "Well, how much is AI here to eliminate jobs?" Which I thought was really interesting. But I think the big tech voices were a lot louder than any little tech ones. Jesse, what would you say?

Jesse Paul:

Yeah. I mean, to your point, Cristiano, the little tech side, I mentioned ABATA, they were really kind of the public face of a lot of that little tech, maybe I would call them medium tech. But there was the Colorado Independent AI Coalition that was formed that was kind of leading a lot of these conversations.

And it was being represented by this guy, Jason Hoppers, one of the most powerful lobbyists in the Colorado capital. But again, to your point, it was a little opaque about who was kind of representing them and who was behind it. I heard some rumors about some folks were influencing it, but I mean, I don't think it was big tech because those guys had their own lobbies there and they were fighting with the AI Coalition, the Independent AI Coalition. But I don't have a clear answer for you on who those folks were.

Cristiano Lima-Strong:

Okay, that's interesting. Well, thank you for that. And so, all right, let's get to the delay. The implementation was supposed to be in February and now it's moved to June. It seems the significance of that is that there's going to be another legislative period to potentially hash this out. Is that right? And what are you all expecting to see come next year if this kicks back up?

Taylor Dolven:

Yeah. So now the law's going to take effect unless anything changes June 30th. And what the governor has been saying is this gives everyone a chance to come back to the table, but Jesse's been here longer than I have, and he's covered a fair share of these kicking the can down the road periods. There was an entire task force formed. Similar deals like the one we're talking about have come about and fell apart. So there's a lot of skepticism about whether what's going to happen come January and what can actually be accomplished.

Jesse Paul:

Yeah. There's kind of an old adage at the Colorado capital, it's nothing gets done until the time starts running out. And so I think the idea was you have a special legislative session, it's open-ended but nobody wants to be there. There's no air conditioning in the Colorado Capitol, and it was really hot when this all started. So nobody wanted to be there, and we were kind of all held hostage by this AI bill. But even under that, even under those pressure cooker situation or standards or guidelines or whatever, they still couldn't come up with a deal. And we're going on two plus years of negotiations now. So the idea that legislature is going to be able to come back when they do in January and in their 120-day lawmaking term, figure this out, I don't have a lot of optimism about it given how things just went during the special session.

And again, they had a whole other session where they couldn't get it done. Taylor mentioned the task force that was created. So I don't know. I don't know what's going to happen. You could see it maybe get punted another year or something like that, or maybe another state comes up with some kind of solution. But one thing I'll mention is I don't think the governor wants this fight. He's a lame duck governor, but this is the thing that he's taking ownership of. And he was saying, "I really hope a Congress passes that state AI law moratorium so I don't have to deal with this" basically. And maybe, I don't know, maybe he's hoping that Congress changes course and does that before the legislature has to return and make some decisions.

Taylor Dolven:

Toward the end of the special session progressives were really harping on, warning everyone to, I guess, keep their eyes peeled for tech lobbying from now till January and even post-January. They said something to the effect of, "We'll know if tech is serious about a compromise and being a team player if there's no big public campaign that comes out against the underlying law." Time will tell what will happen there.

Cristiano Lima-Strong:

You referenced this AI moratorium idea that's been kicked around at the federal level. That effort to pass that failed recently, but key lawmakers have indicated interest to try to revive it. How much did you guys hear about that and how much was that a factor in the negotiations?

Jesse Paul:

It wasn't such a factor in negotiations, but just kind of like I said, I think there's plenty of people in Colorado who would just rather not deal with the situation. So they might be happy to have that. But there is an interesting split among Democrats, even people who are opposed to this. The Attorney general in Colorado has a big tech background as well. He was opposed to the national moratorium, said Colorado and other states should have the opportunity to tweak this on their own.

But at the same time, he disagreed with how Colorado's law was written. So it's just complicated. Every AI business, every business that uses AI as an opinion on how this thing should look. Every democratic politician in Colorado seems to have their own idea of how things should look. And Democrats have the majority here. You see them oftentimes get on the same page with a lot of things. This is one area where they really are split.

Cristiano Lima-Strong:

We've covered a lot of ground. Final thoughts or observations from either of you on these whirlwind negotiations?

Jesse Paul:

I mean, I think this is an interesting warning sign for legislators across the country to maybe have things figured out a little bit more before you bring these bills to begin with. Because there's just been such a problem here with trying to get everybody on the same page. And once you have a law in the books, it really just heightens the stakes. It makes it much harder to have these negotiations. And there were a lot of complaints from the tech industry, and I think fair ones, that they weren't involved in the process in 2024 when this underlying law was passed.

And I actually asked the governor, "Did you regret signing that law? You knew there were concerns back then when you signed it and made this a statute." And he said, "Well, we'll see what happens during the special session." And I'd be kind of curious to check in with him now after the dust is settled. He might wait to answer until after the next legislative session once this pause, this new punt, this new delay expires. But I think there's a lot of regret about how things started because of how things have resulted in terms of just this complete policy chaos.

Taylor Dolven:

I'm really interested in, once this finally does shake out and we have a law or don't, or at least have something, I'm really interested in how it compares to how AI is being regulated elsewhere and what consumer protections exist in other countries. The vacuum at the federal level and Colorado attempting to step up to do this is really interesting to me. So yeah, I want to look more into how it compares to elsewhere.

Cristiano Lima-Strong:

Jesse, Taylor, you guys have been following this more closely than anyone. I know it's been an incredibly busy week, so thank you so much for taking the time to walk us through all this.

Taylor Dolven:

Thanks for having us.

Jesse Paul:

Yeah, thank you.