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We collect, integrate, and analyze data via agreements from multiple sources, including data 
provided by our customers and users and data sourced from third parties under contractual 
arrangements,  and  such  activities  may  subject  us  to  liability  or  limit  our  ability  to  use  the 
collected  data,  which  may  adversely  affect  our  business,  financial  condition,  or  results  of 
operations. 

If we or the customers, users, or third parties from which we source data lack sufficient rights to collect, use, 
process, share, or analyze certain third-party data—including for training or improving analytical or AI models
—we could be subject to legal claims, regulatory scrutiny, or contractual liability. Such claims could require us 
to  limit  functionality,  segregate  data,  or  retrain  models,  and  could  adversely  affect  our  business,  financial 
condition, and results of operations. 

The  costs  of  defending  against  such  litigation,  regardless  of  merit,  are  considerable,  and  such  litigation  may 
divert  management  and  key  personnel’s  attention  and  resources,  which  may  adversely  affect  our  business, 
financial  condition,  and  results  of  operations.  Claims  of  misappropriation,  misuse,  infringement,  privacy 
violations,  or  other  violations  of  intellectual  property  or  contractual  rights,  as  well  as  other  claims  related  to 
using particular data, may be extremely broad, and as such, it is likely we will face certain claims in the ordinary 
course of business.

We  have  been,  are  currently  defending  against,  and  may  in  the  future  be,  subject  to 
intellectual property rights claims by third parties, which are extremely costly to defend, may 
require  us  to  pay  significant  damages  and  may  limit  our  ability  to  use  certain  technologies, 
which may adversely affect our business, financial condition, and results of operations.

There is considerable intellectual property development activity in our industry. Our competitors, as well as a 
number  of  other  entities,  including  non-practicing  entities  and  individuals,  may  own  or  claim  to  own 
intellectual  property  rights  relating  to  our  industry  or  our technology.  As  we  face  increasing  competition  and 
our public profile increases, the possibility of intellectual property rights claims against us may also increase. 

To train our models, we use material from many sources, some of which may include third-party copyrighted 
content  or  trademarks.  Regardless  of  whether  the  material  is  copyrighted  or  the  trademarks  are  registered, 
parties who own the rights to that content or those trademarks, or distribute that content, may attempt to sue 
us based on intellectual property infringement or other theories. We also face claims that outputs generated by 
our models infringe, or facilitate infringement of, third-party works. Lawsuits asserting such claims have been 
filed,  are  pending,  and  may  be  filed  in  the  future  in  the  United  States  and  internationally.  For  example,  in 
September 2025, we reached an agreement to settle a copyright infringement class action, captioned Bartz, et 
al.  v.  Anthropic  PBC  (“Bartz”),  for  $1.5  billion,  which  was  approved  by  the  district  court  in  July  2026.  As 
additional examples, various publishers have filed suit against us alleging copyright infringement of song lyrics 
and unlawful removal of copyright management information in the cases captioned Concord Music Group, Inc., 
et al. v. Anthropic PBC, Concord Music Group, Inc., et al. v. Anthropic PBC et al., BMG Rights Management 
(US) LLC v. Anthropic PBC, Round Hill Music LP, et al. v. Anthropic PBC, Sony Music Publishing (US) LLC v. 
Anthropic  PBC  et  al., and others. Similarly, a third party alleges we accessed and reproduced posts stored on 
the third party’s platform in violation of its legal rights and has filed suit against us, captioned Reddit, Inc. v. 
Anthropic PBC. The possibility of statutory damages under some intellectual property legal frameworks creates 
additional  risk  for  us.  We  are  vigorously  defending  ourselves  in  these  pending  lawsuits  and  believe  we  have 
meritorious  defenses,  though  these  lawsuits  address  novel  issues  and  areas  of  law  that  make  the  results 
uncertain.

We also face patent infringement claims, which may seek substantial damages or injunctive relief limiting our 
ability to use certain technologies, and we expect such claims may increasingly be asserted as our public profile 
grows. Moreover, certain of our competitors hold substantially larger patent portfolios than we do, which they 
could  assert  against  us  and  which  may  limit  our  ability  to  obtain  effective  cross-licenses  or  to  counter  such 
assertions with our own patent rights.

The  costs  of  defending  against  such  litigation,  regardless  of  merit,  are  considerable,  and  such  litigation  may 
divert  management  and  key  personnel’s  attention  and  resources,  which  may  adversely  affect  our  business, 
financial  condition,  and  results  of  operations.  Claims  of  misappropriation,  misuse,  infringement,  or  other 

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