Elon Musk’s xAI sues Colorado

Elon Musk is not currently happy with the state of Colorado, so much so that one of his company’s is suing the state.

Musk’s artificial intelligence company xAI filed a federal lawsuit Thursday (April 9) seeking to block Colorado from enforcing a first-of-its-kind law regulating AI systems, arguing the measure violates the First Amendment.

The lawsuit, filed in U.S. District Court in Colorado, challenges Senate Bill 24-205, which is scheduled to take effect June 30. The law imposes disclosure and risk-mitigation requirements on developers of “high-risk” AI systems used in decisions involving employment, housing, education, health care and financial services.

xAI said the law would force it to alter its flagship AI model, Grok, to reflect Colorado’s views on diversity and discrimination rather than being objective.

“Colorado cannot alter xAI’s message simply because it wants to amplify its own views on the highly politicized subjects of fairness and equity,” the company argued in its filing.

Colorado is not the first state xAI has sued over AI regulation. In December, the company sued California over its Generative AI Training Data Transparency Act, arguing that disclosure requirements compel speech and reveal trade secrets.

Gov. Jared Polis, a Democrat, signed the Colorado bill into law in 2024 but said he did so “with reservations” and called on state legislators to amend it. The law was originally set to take effect in February but was delayed to June 30 after lawmakers failed to reach a compromise on revisions.

The legislation was passed amid growing concern about algorithmic discrimination — the use of AI systems that produce biased outcomes against individuals based on race, gender or other protected characteristics. Supporters say the law increases transparency so people understand when AI is being used in key decisions.

The Colorado attorney general’s office declined to comment on the lawsuit. xAI did not respond to a request for comment.