xAI filed a lawsuit on Thursday seeking to block Colorado from enforcing a new law regulating artificial intelligence systems, intensifying a debate over whether regulation should rest with the states or Washington.
The lawsuit, filed in U.S. District Court in Colorado, challenges Senate Bill 24-205, which is set to take effect on June 30. The law imposes disclosure and risk mitigation requirements on developers of so-called “high-risk” artificial intelligence systems used for decision-making in employment, housing, education, health care and financial services.
Elon Musk’s artificial intelligence company said the law violated the First Amendment by limiting how developers can design artificial intelligence systems and speak credibly on controversial public issues.
The company said the law would force it to change its flagship artificial intelligence model, Grok, to reflect the country’s views on diversity and discrimination, rather than remaining objective.
“Government regulations imposed at the state level and across the country can hinder innovation and impede competition in open markets,” xAI said.
xAI, which recently merged with SpaceX, is seeking a court declaration that the law is unconstitutional and an order blocking its enforcement.
The lawsuit also cites White House executive orders criticizing state AI regulation, as well as warnings from the federal government that a patchwork of state laws could harm U.S. AI leadership and national security.
The Colorado Attorney General’s Office declined to comment on the lawsuit.
While some tech companies and Republican lawmakers want states to leave artificial intelligence regulation to Washington, California’s attorney general warned against relying solely on Congress, pointing to years of delays in data privacy and technology laws.
President Donald Trump’s artificial intelligence adviser favors federal oversight through a streamlined national framework rather than a patchwork of state-level rules.
