DOJ Backs xAI Lawsuit Against Colorado AI Law

The Department of Justice joined xAI's lawsuit challenging Colorado's AI consumer protection law, marking the DOJ's first constitutional challenge in an AI case according to Civil Rights Division head Harmeet Dhillon. The lawsuit alleges Colorado's law, passed in 2024 and set to take effect in June, unconstitutionally forces AI developers to adopt DEI standards by requiring reasonable care against algorithmic discrimination while allowing exceptions to favor certain classes for diversity purposes. xAI, founded by Elon Musk in 2023 and creator of the Grok AI platform, argues the law violates First and Fourteenth Amendment rights through viewpoint discrimination and compelled progressive ideology. The case continues Colorado's recent pattern of high-profile constitutional losses, including an 8-1 Supreme Court ruling this month striking down its conversion therapy ban and previous decisions in 303 Creative and Masterpiece Cakeshop. Democratic Gov. Jared Polis reluctantly signed the pioneering AI law despite concerns it would alienate tech innovators with burdensome regulations.

DOJ and xAI Legal Challenge to Colorado AI Law

• ▪The Department of Justice backed a lawsuit xAI brought against Colorado on Friday.
• ▪xAI alleges Colorado's AI law is a masked effort to force AI developers to adopt diversity, equity and inclusion on their platforms.
• ▪The DOJ and xAI allege Colorado's AI law violates the First and Fourteenth amendments by forcing AI developers to inadvertently discriminate.
• ▪DOJ Civil Rights Division head Harmeet Dhillon said the DOJ's intervention was the department's first constitutional challenge in an AI case.

Colorado's AI Law Requirements and DEI Provisions

• ▪Democratic Gov. Jared Polis reluctantly signed Colorado's AI bill into law in 2024.
• ▪Gov. Jared Polis raised concerns that Colorado's AI law would alienate tech innovators in Colorado because of burdensome regulations.
• ▪The Colorado legislature passed a consumer protection bill regulating AI in 2024.
• ▪Elon Musk founded xAI in 2023.

Colorado's Pattern of Culture War Legal Defeats

• ▪CATO fellow David Inserra wrote that Colorado's AI law will inevitably result in developers restricting lawful speech from their AIs in the name of compliance.
• ▪The Supreme Court issued a broad free speech decision in 303 Creative related to a website designer's right to deny creating a wedding page for a gay couple based on religious beliefs.
• ▪Gov. Jared Polis signed Colorado's conversion therapy ban into law in 2019.
• ▪The Supreme Court ruled Colorado's conversion therapy ban violated the First Amendment because it only restricted certain types of speech.
• ▪The Supreme Court found 8-1 earlier this month that Colorado's conversion therapy ban violated the First Amendment.
• ▪The Supreme Court issued a narrower decision in 2018 in Masterpiece Cakeshop v. Colorado Civil Rights Commission.
• ▪The libertarian CATO Institute observed a trend in Colorado citing three recent landmark Supreme Court cases.

Perspective of Colorado Gov. Jared Polis

• ▪Gov. Jared Polis believed Colorado's AI law imposed excessive regulatory burdens on tech innovators.
• ▪Gov. Jared Polis warned Colorado's AI consumer protection law could drive away technology companies from the state.

Perspective of CATO Institute and libertarian legal observers

• ▪CATO Institute fellow David Inserra predicts Colorado's AI law will cause developers to censor lawful speech to avoid liability.
• ▪The CATO Institute identifies Colorado as repeatedly enacting laws that trigger Supreme Court constitutional challenges.

Perspective of Colorado legislature and AI law supporters

• ▪The Colorado AI law's diversity exception was intended to permit affirmative efforts to remedy historical discrimination.

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