Elon Musk’s xAI company sued Colorado on Thursday in an attempt to prevent the state’s artificial intelligence antidiscrimination law from going into effect.
Senate Bill 205, passed in 2024, is one of the nation’s first attempts to regulate “high-risk” AI systems and protect consumers from “algorithmic discrimination” — or disparate treatment or impacts on protected classes under Colorado law.
In the complaint, which was filed in federal court in Denver, Musk’s lawyers contend that the law is “unconstitutionally vague” and “invites arbitrary enforcement” because it fails to define some key terms. They also contend that Colorado’s law would cause Musk’s AI chatbot, Grok, to “abandon its disinterested pursuit of truth and instead promote the State’s ideological views on various matters, racial justice in particular,” which they say violates the First Amendment.
“Unless the implementation and enforcement of SB24-205 is enjoined, it will violate xAI’s constitutional rights and cause irreparable constitutional harm, impose enormous burdens on xAI and the AI industry, and substitute Colorado’s political preferences for the national economic and security imperative of American AI dominance,” the complaint reads in part.
The lawsuit seeks to keep the law from taking effect.
The complaint comes as the Colorado legislature is gearing up for a third time to debate tweaks to the policy, which is set to go into effect on June 30. When Senate Bill 205 was passed, it was supposed to take effect in February, but that was pushed back to allow for more negotiations on tweaks to the law amid industry and interest group objections.
Colorado Attorney General Phil Weiser’s office, which would have the responsibility for enforcing Senate Bill 205, told The Colorado Sun it has “no comment” on the litigation.
Musk’s lawsuit is a “fishing expedition”
State Rep. Briana Titone, D-Arvada, one of Senate Bill 205’s lead sponsors, told The Sun that Musk’s lawsuit seems like a “fishing expedition” that misinterprets the core of the law.
“This is where the disconnect is. SB 205 is about consequential decisions, not about freedom of speech,” Titone said. “It’s completely detached from it. And they’re trying to use this argument for a law that has nothing to do with what he’s saying. We’re not restricting speech. Our bill does not say that Grok still can’t be a dick.”
State Rep. Manny Rutinel, D-Commerce City, another one of the bill’s main sponsors, told The Sun that the lawsuit seems like a plot for Musk to continue to “enrich himself and his MAGA cronies.”
“Coloradans deserve technology that works for everyone, not just billionaires,” Rutinel said.
Senate Bill 205 has been contentious from the start. Gov. Jared Polis reluctantly signed it in 2024 and urged Colorado lawmakers at the time to “reexamine” the law in future legislative sessions.
“Laws that seek to prevent discrimination generally focus on prohibiting intentional discriminatory conduct,” Polis wrote in a signing letter about the bill. “Notably, this bill deviates from that practice by regulating the results of AI system use, regardless of intent, and I urge the legislature to reexamine this concept as the law is finalized before it takes effect in 2026.”
The law has also attracted criticism from AI entrepreneurs like Reid Hoffman, the founder of LinkedIn, as well as business groups.
Hoffman sharply criticized the law during a chat with Denver Mayor Mike Johnston at the DenAI Summit in 2024.
Hoffman said the law is “not a smart play” and could “prevent the future of software from being in Colorado,” Denverite reported.
The U.S. Chamber of Commerce told Polis in a letter in 2024 that the law could have “adverse impacts” on businesses that need to use AI to remain competitive and could “unnecessarily hamper innovation.”
Musk’s lawsuit was filed as lawmakers, state officials and AI advocates are working on changes to Senate Bill 205. On March 17, the Colorado AI Policy Working Group — a collective of state lawmakers, school district officials and other AI technology consumers — released a plan that seeks to address the concerns.
For instance, the proposal would roll back requirements for employers to report discriminatory outcomes to the Colorado attorney general, conduct annual reviews of the AI tools they use and undertake impact assessments. However, a bill containing the proposed changes has not yet been introduced, and the 2026 legislative session is scheduled to end May 13.
The federal government has also attempted to preempt state regulations of AI. In December, President Donald Trump signed an executive order that specifically called out Colorado’s AI law as a “cumbersome” regulation that could stifle innovation. The executive order also called for the federal secretary of commerce to review state laws regulating AI and to restrict federal broadband funding to states with “onerous” AI laws.
On March 20, the Trump administration released its National Policy Framework for AI, which explicitly calls for prohibiting laws that “coerce” AI models to “ban, compel or alter content based on partisan or ideological agendas.”
Titone pushed back against the administration’s aims, arguing that the executive order “doesn’t hold any water” relative to Colorado’s legislative process.
“The executive order can’t compel us to stop doing what we’re doing,” Titone said. “This is just an attempt to get some attention.”
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