By Shaina Cole | Contributing Writer, Rocky Mountain Voice
The Colorado attorney general agreed last week to stop enforcing the state’s landmark artificial intelligence law. Not because a court told him to. Because he agreed to it himself.
That voluntary freeze, formalized in a joint filing with plaintiff xAI LLC, came the same afternoon the U.S. Department of Justice moved to join the lawsuit challenging SB24-205 — Colorado’s AI consumer protection law set to take effect June 30.
Chief Judge Daniel D. Domenico granted both the intervention and the standstill within hours. The scheduling conference set for June 16 is gone. Case deadlines are suspended. The courtroom is waiting on a legislature that has 16 days left in its session and a replacement bill that still hasn’t been formally introduced.
Three legal events. One Friday afternoon. A May 13 adjournment deadline that now controls everything.
Why the DOJ moved — and how fast it got in
Acting Attorney General Todd Blanche signed a one-page certificate April 24 declaring the case to be “of general public importance” under Section 902 of the Civil Rights Act of 1964. Once it’s on paper, the federal government has a statutory right to intervene in Equal Protection cases involving race, religion, sex, or national origin. No judicial discretion. No hearing required.
Domenico granted the motion the same day.
The DOJ’s 19-page complaint focuses entirely on the Equal Protection Clause of the Fourteenth Amendment and lays out two theories.
Colorado is asking xAI design Grok to produce outputs the state considers non-discriminatory across race, sex, religion, reproductive health, gender identity and a catch-all of any other class Colorado law protects. That means building those standards into the model itself — into the training, the instructions the system runs on, the limits placed on what it will and won’t say.
xAI’s complaint calls it being forced to “abandon its disinterested pursuit of truth and instead promote the State’s ideological views.” The DOJ frames it as the state mandating that a private company engineer its product around government-defined notions of fairness — which, they argue, is itself compelled discrimination.
The second theory targets the law’s diversity carve-out directly. SB24-205 exempts from its definition of “algorithmic discrimination” any AI system used to “increase diversity or redress historical discrimination.”
The DOJ argues that creates two legal tiers: identical algorithmic conduct is lawful if it favors certain groups and unlawful if it doesn’t. Under Students for Fair Admissions (2023) and City of Richmond v. Croson (1989), remedying past discrimination requires evidence of specific, identified discriminatory acts — not a generalized historical claim. “There is no evidence of past intentional discrimination by Colorado or by private algorithmic developers or deployers in the nascent industry of AI,” the complaint states.
The Civil Rights Division team is led by Assistant Attorney General Harmeet K. Dhillon. The filing is among the first visible actions by the White House’s AI Litigation Task Force, established by executive order in December 2025 with an explicit mandate to challenge state AI laws inconsistent with federal policy.
The Trump administration is not treating this as a quiet legal intervention. Dhillon’s TV hit and X post show DOJ wants the case in front of a public audience, not just a judge.
Within hours Dhillon appeared on Newsmax and posted to social media, framing the intervention beyond the legal brief. “Colorado’s law carves out exceptions for discrimination for ‘good purposes’ — forcing companies to have their algorithms make value judgments and challenging our ability to have neutral tools,” she wrote.
A defendant who stopped defending
Attorney General Philip Weiser is the named defendant in a lawsuit brought jointly by xAI and the federal government.
He has agreed not to initiate any enforcement action against AI companies — including not opening an investigation — for violations of SB24-205 until 2 weeks after a court rules on xAI’s preliminary injunction (PI) motion.
On May 5, 2025, Weiser co-signed a letter with Governor Jared Polis, Denver Mayor Mike Johnston, U.S. Senator Michael Bennet and U.S. Representatives Joe Neguse and Brittany Pettersen urging the legislature to delay SB24-205 until January 2027.
When lawmakers gave them only a deadline extension, Weiser went public in August 2025 at Mountain Connect, warning the bill “is really problematic, it needs to be fixed. And, after a year’s effort to try to fix it, it didn’t get fixed.” Polis called a special session. The legislature moved the date. It did not fix the law.
Now Weiser holds exclusive enforcement authority over a statute he has consistently said is broken and has agreed in open court not to use it.
What the legislature does next controls everything
The entire litigation is now keyed to what the Colorado General Assembly does before May 13.
On March 17 the Governor’s AI Policy Working Group published a draft framework to repeal and replace SB24-205. The draft bill — labeled “Version: KILO” — is a fundamental rewrite, not a patch. It scraps the law’s European-style governance model entirely and replaces it with something closer to a consumer privacy framework.
Gone are the provisions at the heart of the lawsuit: the affirmative duty to avoid ‘algorithmic discrimination,’ the developer disclosure cascade, and the diversity carve-out that the DOJ specifically challenged as a racial double standard.
The draft creates a narrower regulatory target. It covers “automated decision making technology” — ADMT — but only when the technology “materially influences” a consequential decision. That’s a higher bar than SB24-205’s “substantial factor” standard, and it means a lot of ordinary AI use falls outside the law: spellcheck, chatbots, content moderation and routine low-stakes decisions are explicitly excluded.
What’s left is a consumer-facing framework. When ADMT is used in a consequential decision — a job application, a loan, a housing decision, a healthcare decision — the consumer gets a notice at the point of interaction. If the outcome is adverse, whoever used the AI to make the decision has 30 days to provide a plain-language explanation. The consumer can request human review, correct inaccurate data, and the responsible party must retain records for three years.
Enforcement stays exclusively with the AG, but the draft adds a 90-day cure period before penalties attach — a provision the original law lacked entirely.
The replacement would take effect January 1, 2027. If it passes, SB24-205 is repealed before it ever takes effect. The constitutional questions in the lawsuit don’t disappear — they shift to the new law — but the specific provisions the DOJ and xAI have attacked would be gone.
As of Friday the draft had not been formally introduced in the legislature.
Senate Majority Leader Robert Rodriguez, the original bill’s sponsor, told Axios Denver in March “They kept the framework and are attempting to keep the important parts of the policy.”
No bill number has been assigned. Sixteen days remain in the session.
Under the April 24th stipulation, whatever the legislature produces, Weiser must complete rulemaking before xAI’s PI clock starts.
xAI then has 28 days after final rulemaking to file its PI motion. If nothing passes and Weiser begins rulemaking on SB24-205 as written, the constitutional reckoning arrives on schedule.
If the replacement passes, the clock resets on a narrower target. Either way, June 30 is no longer the operative date. May 13th is.
What xAI is arguing — and what the DOJ left alone
xAI’s original complaint runs 75 pages and raises six constitutional claims, including the Equal Protection count the DOJ joined.
The First Amendment argument is central: that building an AI model is protected expressive activity and that SB24-205 compels xAI to redesign Grok to reflect Colorado’s preferences on fairness and equity. Every choice in constructing a model — selecting training data, writing system prompts, imposing output guardrails — constitutes editorial judgment. They claim the state cannot commandeer that process.
xAI also raised a Dormant Commerce Clause challenge. The company maintains no offices in Colorado, yet SB24-205 applies wherever a single Colorado resident is affected by an AI system. An out of state company with no Colorado presence could face $20,000-per-violation penalties under the law.
The DOJ did not join those counts. Its complaint is limited to Equal Protection but notes that SB24-205 “is unconstitutional in other ways too” — alignment without formally litigating every theory.
The case docket now lists: United States of America & X.AI LLC v. Philip J. Weiser, Colorado Attorney General. No hearing is scheduled. No deadlines are set.
A replacement bill narrows the target but doesn’t end the case. No bill at all leaves the original law intact and puts the full weight of six constitutional claims before a federal judge.
Colorado has been trying to fix this law for two years. Sixteen days left to see if this time is different.
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