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The Department of Justice joined forces with Elon Musk on Friday by backing a lawsuit his company xAI brought against Colorado alleging a state law regulating artificial intelligence developers was a masked effort to force them to adopt diversity, equity and inclusion on their platforms.
DOJ Civil Rights Division head Harmeet Dhillon said DOJ’s intervention was the department’s first constitutional challenge in an AI case.
Colorado faces allegations from the DOJ and xAI that its state law, set to take effect in June, violates the First and Fourteenth amendments by forcing AI developers to inadvertently discriminate, an allegation familiar to Colorado, which has faced a string of legal losses in other high-profile culture-war cases in recent years.
“We join @xai’s landmark suit, and stand against woke DEI standards being imposed by Colorado,” Dhillon said.
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Elon Musk receives a golden key from President Donald Trump in the Oval Office at the White House in Washington, D.C., on May 30, 2025. (Nathan Howard/Reuters)
The lawsuit arose from a controversial consumer protection bill the Colorado legislature passed in 2024 that required “high-risk” developers like xAI, which built the popular platform Grok, to exercise “reasonable care” to protect consumers from “algorithmic discrimination,” saying AI tools must not result in discrimination based on protected classes in the state, such as race and religion. Musk founded xAI in 2023.
The Colorado law also targeted entities that deploy the AI platforms, like hospitals or banks, saying the law was intended to make sure consumers in those areas were treated fairly.
Democratic Gov. Jared Polis reluctantly signed the bill into law in 2024 but has raised concerns over whether it would alienate tech innovators in his state because of the slate of burdensome regulations it imposed on them. Fox News Digital reached out to Polis’ office for comment on DOJ’s intervention in the lawsuit.
The DOJ lawyers argued in their lawsuit that Colorado’s bill actually “fosters further discrimination,” citing language in the bill that allowed AI developers to favor certain classes of people in their AI tools when it was “to increase diversity or redress historical discrimination.”
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Colorado Gov. Jared Polis speaks to members of the media in the spin room following the first vice presidential debate at the CBS Broadcast Center in New York on Oct. 1, 2024. (Al Drago/Bloomberg)
The law “jeopardizes the United States’ position as the global AI leader by requiring AI systems to incorporate discriminatory ideology that prioritizes preferred demographic characteristics and outcomes over accurate and merit-based outputs,” government lawyers wrote.
The DOJ’s lawsuit focused on what it alleged were equal protection violations, while Musk’s xAI lawsuit alleged numerous violations, including unconstitutional viewpoint discrimination. xAI lawyers contended in their complaint, brought earlier this month, that the law would force AI developers to output “progressive ideology.”
“By requiring ‘developers’ and ‘deployers’ to differentiate between discrimination that Colorado disfavors and discrimination that Colorado favors, SB24-205 compels Plaintiff xAI—a ‘developer’ under the law—to alter Grok, forcing Grok’s output on certain State-selected subjects to conform to a controversial, highly politicized viewpoint,” xAI lawyers wrote.
The Grok application appears on a smartphone screen in Athens, Greece, on Oct. 2, 2025. (Nikolas Kokovlis/NurPhoto)
One law firm said Colorado would become a “national test case” for AI consumer protection, saying it was the first state to pass such a law, suggesting the state would once again become a case study on how far it could push constitutional bounds.
Earlier this month, the Supreme Court found 8-1 that Colorado’s conversion therapy ban, signed into law by Polis in 2019, violated the First Amendment because it only restricted certain types of speech, in this case talk therapy when the therapy aimed to prevent minors from embracing being transgender or gay.
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That ruling followed a broad free speech decision in 303 Creative related to a website designer’s right to deny creating a wedding page for a gay couple based on religious beliefs and a narrower 2018 decision in Masterpiece Cakeshop v. Colorado Civil Rights Commission.
The libertarian CATO Institute observed a trend in Colorado, citing the trio of recent landmark Supreme Court cases.
“This law will inevitably result in developers restricting lawful speech from their AIs in the name of compliance, especially given Colorado’s view of what constitutes harmful discrimination,” CATO fellow David Inserra wrote. “And Colorado clearly has strong views on what kinds of speech are harmful and discriminatory, as seen in its multiple losses at the Supreme Court.”
Fox News Digital reached out to an xAI attorney on Friday.
