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Risks Related to Legal and Regulatory Matters

We  are  subject  to  claims,  lawsuits,  investigations,  executive  and  administrative  orders  and 
directives, other regulatory actions, and various actions and proceedings, and face potential 
liability, expenses for legal claims, and harm to our business.

We are subject to claims, lawsuits, arbitration proceedings, government inquiries and investigations, executive 
and  administrative  orders  and  directives,  and  other  legal,  regulatory,  and  administrative  actions  and 
proceedings, including those involving intellectual property disputes, compliance with regulatory requirements, 
government  approvals  and  authorizations,  labor  and  employment,  anti-discrimination,  commercial  disputes, 
competition, privacy, consumer protection, customer complaints, advertising, and other matters relating to our 
technology,  models,  platform,  and  applications,  and  we  may  become  subject  to  additional  types  of  claims, 
lawsuits, arbitration proceedings, government inquiries and investigations, executive and administrative orders 
and directives, and other legal, regulatory, and administrative actions and proceedings as our business grows 
and as we deploy new technologies, models, platforms, and applications. In particular, as our models, platform, 
and applications increasingly include agentic AI systems capable of taking autonomous actions with real-world 
consequences,  we  may  face  novel  legal  theories  of  liability,  including  intellectual  property  infringement, 
product  liability,  agency,  and  negligence  claims,  that  have  not  been  tested  in  the  context  of  autonomous  AI 
systems  and  for  which  the  scope  of  our  potential  exposure  is  uncertain. In  addition,  as  we  expand  our 
healthcare and life sciences offerings, regulators may conclude that certain of our products, or our customers’ 
use of them, are subject to healthcare regulation or to other laws governing healthcare and health information, 
which could require us to obtain authorizations, modify or restrict our offerings, or incur significant compliance 
costs. Errors or other undesirable outputs from our models in these contexts could contribute to patient harm, 
compromised research, or regulatory failures by our customers, and could expose us to claims from customers, 
patients, and other third parties, as well as to regulatory inquiries and enforcement actions.

We are also subject to antitrust and competition law risk arising from our public advocacy regarding AI safety 
and  the  responsible  pace  of  AI  development  and  from  our  participation  in  industry  groups,  safety 
collaborations, and standard-setting initiatives. Communications, advocacy, or collaboration among companies 
that  develop  frontier  AI  models,  or  conduct  alleged  to  reflect  coordination  among  such  companies,  may  be 
characterized  as  concerted  action  subject  to  the  antitrust  and  competition  laws,  including  Section  1  of  the 
Sherman  Act  and  analogous  state  and  non-U.S.  laws,  even  where  undertaken  for  safety  purposes,  conducted 
publicly, or intended as advocacy for governmental action or industry standards. In September 2026, a putative 
class  action  was  filed  against  us  and  other  developers  of  frontier  AI  models  in  the  U.S.  District  Court  for  the 
Northern  District  of  California,  alleging  that  we  and  the  other  defendants  agreed  to  restrain  competition  by 
slowing the pace at which we develop and improve our respective AI models, in purported violation of Section 1 
of  the  Sherman  Act.  The  complaint  seeks  treble  damages,  injunctive  relief,  and  other  relief  on  behalf  of  a 
purported class of purchasers of the defendants’ paid consumer subscriptions. We disagree with the claims and 
intend  to  defend  the  matter  vigorously,  but  the  outcome  of  this  and  any  similar  proceeding  is  inherently 
uncertain.

Antitrust litigation can be complex, protracted, disruptive, and expensive, and an adverse outcome could result 
in  treble  damages  and  injunctive  relief.  We  could  also  become  subject  to  additional  private  litigation  or  to 
investigations  or  enforcement  actions  by  the  U.S.  Department  of  Justice,  the  FTC,  state  attorneys  general,  or 
non-U.S. competition authorities. We have proposed public efforts to work with the U.S. government and other 
developers of frontier AI models to establish safety standards, including with respect to the pace of capability 
development, and have suggested that such collaboration may warrant a narrow exemption or safe harbor from 
antitrust  laws.  These  proposals  have  drawn  public  opposition  from  political  leaders,  some  of  whom  have 
characterized such efforts as anticompetitive regardless of the purpose of such exemption or safe harbor. There 
is no assurance that any such exemption or safe harbor will be adopted. Our advocacy for such an exemption, 
and any safety commitments we pursue with other developers of frontier AI in its absence, could subject us to 
additional  regulatory,  litigation,  and  other  risks.  These  risks  may  cause  us  to  limit  or  modify  our  public 
advocacy,  our  participation  in  industry  safety  and  standard-setting  initiatives,  and  our  communications  with 
other developers of frontier AI, which could adversely affect our ability to pursue collaborative approaches to AI 
safety that we believe are important to our mission.

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