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forms a part. The grant-date fair value of each RSU subject to these awards will be equal to the price per share 
of the shares sold in this offering. These RSUs will vest upon the satisfaction of both a service-based condition 
and a performance-based condition as described above. Assuming a grant-date fair value of $           per share, 
which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, we 
would  expect  to  record  stock-based  compensation  expense  of  $                     billion  related  to  such  RSUs,  over  a 
weighted-average  period  of  approximately                     years, commencing in the quarter in which this offering is 
completed.  Following  the  completion  of  this  offering,  the  stock-based  compensation  expense  related  to  RSUs 
and other outstanding equity awards will result in increases in our expenses in future periods, in particular, in 
the quarter in which this offering is completed.

If  we  fail  to  generate  adequate  revenue  to  offset  increases  in  our  operating  expenses,  improve  our  operating 
efficiencies, or otherwise manage our costs as we invest in our business, we may continue to incur significant 
losses in the future and may not be able to achieve or sustain profitability.

Our results of operations may fluctuate significantly on a period-to-period basis, including as 
a  result  of  strategic  investment  decisions  and  substantial  compute-related  expenditures, 
which could cause the market price of our Class A common stock to decline.

Our  results  of  operations  have  historically  varied  from  period  to  period,  and  we  expect  that  our  results  of 
operations will continue to vary significantly from quarter to quarter and from year to year in the future, such 
that  the  results  of  any  one  period  should  not  be  relied  upon  as  an  indication  of  future  performance.  In 
particular, our financial performance may be significantly influenced by strategic decisions we make regarding 
the allocation of resources and the amount and timing of operating expenses and capital expenditures that we 
may  incur  to  maintain  and  expand  our  business  and  operations  and  to  remain  competitive.  We  may  make 
significant and, at times, discrete investments in areas such as research and development, compute and related 
infrastructure, product development, safety and security initiatives, and go-to-market expansion, which may be 
uneven in size and timing. These investments may materially increase our expenses in a given period and cause 
our results of operations to fluctuate significantly or vary meaningfully from period to period, and may result in 
periods  of  reduced  margins  or  increased  losses  even  if  our  underlying  business  trends  remain  unchanged  or 
continue to improve. As a result, our financial performance may not follow any consistent pattern, and prior or 
interim periods of improved results of operations should not be viewed as indicative of our future performance.

Our revenue in any period has also included, and we expect will continue to include, amounts from customers 
that  we  subsequently  determine  are  using  our  models,  platform,  and  applications  in  violation  of  our  usage 
policy  or  commercial  terms,  and  whose  revenue  would  not  be  expected  to  recur  following  restriction  or 
termination of their access. We believe this dynamic is common in our industry. Detection, investigation, and 
enforcement  take  time,  and  we  cannot  assure  you  that  we  will  identify  such  usage,  or  restrict  or  terminate  a 
customer’s access, on a timely basis or at all. Customers may evade our controls, and customers whose access is 
restricted  or  terminated  may  re-register  under  new  accounts.  As  a  result,  revenue  from  such  customers  may 
continue or recur notwithstanding our enforcement efforts. Our continued detection and enforcement efforts, 
and  in  particular,  the  enhancement  of  such  efforts  in  August  and  September  2026,  and  the  timing  of  any 
resulting restrictions or terminations, are expected to reduce the percentage of revenue from customers using 
our models, platform, and applications in violation of our usage policy or commercial terms, and may reduce 
our overall revenue and growth rates in future periods and contribute to variability in our results from period to 
period.

Our  results  of  operations  are  also  affected  by  seasonal  variations  in  the  usage  of  our  models,  platform,  and 
applications.  Because  our  revenue  is  primarily  consumption-based,  we  have  experienced,  and  expect  to 
continue  to  experience,  lower  usage  around  holiday  and  vacation  periods  in  the  summer  and  winter,  when 
certain  customer  workflows  slow  down  and  overall  customer  activity  declines.  Our  results  of  operations  may 
also  vary  with  the  timing  and  cadence  of  our  model  and  product  releases,  which  are  uneven  from  period  to 
period  and  may  cause  usage,  and  therefore  revenue,  to  increase  or  decline  between  periods.  Our  historical 
growth rates may have masked the impact of seasonal trends on our results. As our growth rate declines over 
time,  we  expect  seasonal  effects  to  become  more  apparent  in,  and  to  have  a  greater  effect  on,  our  period-to-
period  results.  In  addition,  other  seasonal  trends  may  develop,  and  the  seasonal  trends  that  we  currently 
experience may become more pronounced, as we continue to scale.

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