The US Justice Department said on Friday it intervened in a case brought by xAI against the state of Colorado, which seeks to prevent "algorithmic discrimination" with a new law.

This marks the first time the US Justice Department has intervened in a case challenging state-level AI regulation. The DOJ said that the law violates the Equal Protection Clause of the Fourteenth Amendment as it pushes AI companies to account for race and sex in their systems.

This, the DOJ argues, effectively requires developers and deployers to discriminate based on race, sex, religion, and other protected characteristics.

“Laws that require AI companies to infect their products with woke DEI ideology are illegal,” said Assistant Attorney General Harmeet K. Dhillon of the Justice Department’s Civil Rights Division.

“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.”

The DOJ said the law could jeopardize the United States’ position as the global AI leader by pushing developers to prioritize “preferred demographic characteristics and outcomes over accurate and merit-based outputs.”

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The new Colorado law will regulate high-risk AI systems to prevent algorithmic discrimination, requiring AI developers and deployers to use reasonable care to assess and mitigate risks of discrimination in areas such as hiring, housing, healthcare and education.

It is set to take effect on June 30th, 2026, after being postponed from February 1st following significant pressure from tech giants over "unworkable" and overly complex regulations.

Earlier this month, xAI sought to block enforcement of the law, arguing that it violates the First Amendment by restricting how developers design AI systems and compelling speech on contentious public issues.

The Trump administration has been pushing for a single AI framework, arguing that state rules can stifle innovation. In March 2026, it released its "National Policy Framework for Artificial Intelligence,” outlining proposals to establish a national standard and preempt conflicting state-level regulations.

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