A novel law was slated to take effect in Colorado in June this year, to help regulate AI use and address the potential discrimination people might face as AI-powered platforms become a routine part of housing and employment negotiations. But earlier this month, Elon Musk’s xAI—which owns X, formerly known as Twitter, and has now merged with SpaceX—sued to block the law, arguing it was burdensome and unconstitutional.
Now the government has effectively co-signed the lawsuit, claiming that the Colorado law violates federal equal protection laws. The law, SB24-205—the first of its kind in the country—aimed to create some guard rails around how AI is deployed, by stipulating that AI developers should take steps to prevent algorithmic discrimination and notify people when AI is used. The intent was to protect consumers against potential bias as AI rapidly reshapes how employers and government officials make crucial decisions.
The lawsuit brought by xAI argued that the law “imposes onerous, nationwide requirements that impermissibly burden xAI’s constitutional rights.” But the Justice Department took particular issue with a carveout in the law, which condoned the use of AI to “increase diversity or redress historical discrimination”—in other words, what the department views as reverse discrimination in the interest of promoting diversity.
“Laws that require AI companies to infect their products with woke DEI ideology are illegal,” assistant attorney general Harmeet Dhillon said in a statement. “The Justice Department will not stand on the sidelines while states such as Colorado coerce our nation’s technological innovators into producing harmful products that advance a radical, far left worldview at odds with the Constitution.”
When the bill was signed into law, the Colorado governor expressed some reservations about how it would be implemented and what it would require for full compliance. Governor Jared Polis also cautioned that this kind of legislation might “tamper innovation and deter competition” if adopted in just a handful of states, rather than more universal regulations at the federal level.
The Justice Department’s objection to the Colorado law seems to be in line with the Trump administration’s desire to drive AI innovation unfettered by regulation, as well as its broader stance on DEI. In December, Trump signed an executive order intended to strike down AI regulations, by superseding the “most onerous and excessive laws emerging from the states that threaten to stymie innovation,” like the law enacted in Colorado. (The law was specifically referenced in the order.) Earlier this year, under the aegis of the executive order, the Justice Department introduced an AI Litigation Task Force to mount legal challenges in response to state laws that targeted AI.
Beyond the implications for AI innovation, however, this lawsuit also offers another opportunity to push back against what the Trump administration sees as DEI-related discrimination. Trump has targeted DEI efforts across the private sector and government through many different avenues, exerting his influence on independent federal agencies like the Equal Employment Opportunity Commission. The Justice Department, too, has already shown fighting DEI is a priority, recently negotiating a $17 million settlement with IBM over its diversity programs. The decision to join the xAI lawsuit is just the latest example of the Trump administration using DEI to justify legal challenges.