Small print.
Wide open.

Table of Contents

Our mission-driven culture is one of our core characteristics that helps us to attract and retain key personnel 
and differentiate us in the market. If we are unable to maintain our culture, as well as balance our commitment 
to maintaining our culture with the demands of rapid growth, competition, and operating as a public company, 
our employee morale, engagement, and retention could suffer, requiring us to incur additional costs or adopt 
alternative  recruiting  strategies,  which  could  adversely  affect  our  business,  financial  condition,  and  results  of 
operations.

We  face  intense  competition,  and  if  we  are  unable  to  compete  effectively,  our  business, 
financial condition, and results of operations could be adversely affected.

The market for AI models, platforms, and applications is rapidly evolving, intensely competitive, and subject to 
frequent  and  significant  changes  in  technology,  evolving  customer  requirements  and  expectations,  shifting 
industry  standards,  regulatory  developments,  new  market  entrants,  and  new  models,  platforms,  and 
applications. We face competition from a wide range of companies across multiple categories. 

We  compete  directly  with  companies  developing  frontier  models  for  third-party  software  developers  and 
enterprises.  Our  primary  competitors  in  this  category  include  Alphabet  Inc.  (together  with  its  affiliates, 
“Google”)  and  OpenAI  Group  PBC  (“OpenAI”).  These  competitors  are  developing  increasingly  capable  AI 
systems  and  compete  with  us  for  customers,  talent,  compute,  and  strategic  partnerships.  Many  have 
substantially  greater  financial,  technical,  and  marketing  resources  than  we  do,  their  own  or  greater  access  to 
sources  of  compute,  longer  operating  histories,  greater  brand  recognition,  and  established  relationships  with 
current and potential customers and partners, which facilitates their ability to integrate their models into first-
party applications sold directly to businesses.

We  also  compete  with  a  broader  set  of  model  providers  operating  at  or  below  the  frontier,  including  large 
companies,  specialized  AI  labs,  and  a  growing  range  of  other  open-weight  or  open-source  (shared  weights, 
training data, and code) models released by international and domestic organizations. Such providers compete 
for a growing range of enterprise workloads that prioritize cost efficiency over intelligence. In particular, certain 
large  companies  compete  through  proprietary  AI  models,  integrated  AI  capabilities  in  existing  products,  and 
control  of  cloud  infrastructure  and  distribution  channels.  Some  of  these  companies  also  have  substantially 
greater  financial,  technical,  and  marketing  resources  than  we  do,  their  own  or  greater  access  to  sources  of 
compute, longer operating histories, greater brand recognition, and established relationships with current and 
potential customers and partners. In addition, some have substantially broader and more diverse product and 
service offerings and may be able to leverage existing relationships with distribution partners and customers to 
gain business in ways that discourage customers from purchasing our models, platform, and applications. For 
example, competitors may bundle AI capabilities with other products, integrate AI functionality into products 
that  customers  already  use,  offer  closed  technology  platforms  that  lock  customers  into  their  ecosystems,  sell 
products  at  zero  or  negative  margins  to  gain  market  share,  or  use  their  substantial  financial  resources  to 
subsidize the cost of AI models, platforms, and applications. Customers may prefer to purchase from existing 
vendors  with  which  they  have  established  relationships,  even  if  our  models,  platform,  and  applications  offer 
superior  features  or  performance.  Further,  large  companies  that  are  currently  our  customers  may  choose  to 
develop their own AI capabilities internally rather than purchase our models, platform, and applications.

Specialized AI labs, on the other hand, are competitive due to their ability to offer specific AI applications and 
differentiated  business  models.  These  companies  can  move  quickly,  attract  top  talent,  develop  novel 
approaches,  platforms,  or  business  models  that  disrupt  existing  competitive  dynamics,  and  introduce 
technologies or products with greater performance or functionality, lower cost, ease of implementation, or other 
advantages. Some competitors or customers may have access to proprietary datasets, distribution channels, or 
domain-specific  expertise  that  we  do  not  possess,  or  new  competitors  may  emerge  that  address  particular 
industries or use cases more effectively than our models, platform, and applications, which could enable them 
to  develop  more  specialized  or  higher-performing  AI  systems.  In  addition,  competitors,  customers,  or  other 
third  parties  have  attempted  in  the  past  and  will  likely  continue  to  attempt  to  replicate,  distill,  extract,  or 
otherwise  derive  the  functionality  or  capabilities  of  our  models  through  permitted  or  impermissible  means, 
including  through  our  research  previews.  These  actions  could  reduce  the  technological  differentiation  of  our 
offerings; enable the development of competing products at lower cost, with reduced research and development 
investment,  or  that  replicate  our  models  without  safety  controls  or  safeguards  that  were  incorporated  in  our 
versions;  implicate  national  security  concerns  or  strain  geopolitical  tensions; and  intensify  competitive 
pressures. In addition, efforts to prevent or mitigate model replication, distillation, or other forms of extraction 

40