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government issued an executive order establishing a voluntary framework for developers of frontier AI models 
to engage with the government prior to the deployment of such AI technologies, directing federal agencies to 
strengthen  cyber  defenses,  and  prioritizing  enforcement  against  criminal  misuse  of  AI;  although  that 
framework is voluntary and does not establish a mandatory governmental licensing, preclearance, or permitting 
requirement  for  the  development  or  deployment  of  AI  models,  it  reflects  increasing  federal  attention  to  the 
national  security  implications  of  frontier  AI  and  the  order  may  be  followed  by  further  executive  or  legislative 
action.  If  executive  or  legislative  action  of  this  nature  were  enacted  to  regulate  AI  technologies,  it  could 
constrain how we operate our business.

We  have  also  advocated,  and  expect  to  continue  to  advocate,  for  regulation  and  oversight  of  frontier  AI, 
including industry-wide standards primarily relevant to the use of AI to accelerate AI development, so that AI 
capabilities  do  not  advance  faster  than  the  safety,  alignment,  and  security  practices  needed  to  support them, 
and we have proposed working with the U.S. government and other frontier AI developers to establish safety 
standards.  Regulatory  or  other  measures  of  the  kind  we  advocate,  if  adopted,  would  apply  to  us  and  could 
increase  our  compliance  burdens,  limit  our  product  development  or  deployment  flexibility,  affect  how  and 
when we develop or release new models, or otherwise slow our growth. The effect that any such measures would 
have on the rate at which AI capabilities advance, and on our business, is uncertain and would depend on the 
specific  requirements  adopted  and  on  the  extent  to  which  safety,  alignment,  and  security  practices  advance 
together  with  model  capabilities.  There  is  no  assurance  that  policymakers  will  adopt  the  approaches  we 
support, and our advocacy has in the past drawn, and may continue to draw, criticism, heightened scrutiny, or 
other challenges.

Regulatory  approaches  to  AI  also  vary  significantly  by  geography  and  may  be  influenced  by  local  political, 
economic,  social,  or  environmental  considerations.  In  some  jurisdictions,  public  concern  regarding  the 
potential  displacement  of  labor  by  AI  systems,  the  perceived  societal  impacts  of  automation,  or  the 
environmental footprint associated with AI development and deployment, has led, or could lead, to restrictive 
legislation  or  other  governmental  actions.  In  particular,  to  the  extent  the  rate  of  job  displacement  rapidly 
increases due to the adoption of AI or for related reasons, whether actual or perceived, governments or other 
regulatory authorities may intervene to slow the rate of adoption of AI, restrict its use, or take other actions that 
increase the cost of developing, deploying, or commercializing AI systems. Even in the absence of any legal or 
regulatory requirements, we may from time to time voluntarily elect to take actions intended to ameliorate the 
impact of such displacement. Any such actions would represent additional costs and expenditures for which we 
may  not  receive  a  corresponding  commercial  benefit,  and  there  can  be  no  assurance  that  any  such  actions 
would  be  effective  in  reducing  displacement-related  harms  or  in  mitigating  the  associated  reputational, 
regulatory, or political risks.

Increasingly  restrictive  AI  regulation  in  the  United  States  and  other  western  jurisdictions  could  enable 
competitors  operating  in  less  regulated  environments  to  innovate,  scale,  and  deploy  AI  technologies  more 
rapidly,  potentially  allowing  such  competitors  to  become  more  advanced  and  pose  greater  competitive  or 
strategic threats over time. In particular, increasing strategic competition between the United States and China 
in  AI  development  may  lead  to  divergent  regulatory  approaches,  with  the  potential  for  the  United  States  to 
impose  restrictions  on  AI  companies’  interactions  with  Chinese  entities  or  markets,  and  for  China  to  impose 
reciprocal measures that limit access to or demand for U.S.-origin AI models, platforms, and applications.

As  a  result  of  these  and  other  regulatory  developments,  our  business  could  be  subject  to  a  wide  range  of 
regulatory limitations, obligations, or restrictions, including, among other things:

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limitations, conditions, or prohibitions on certain AI use cases, applications, or deployment contexts;

requirements  to  modify,  restrict,  delay,  or  withdraw  specific  models,  features,  or  functionalities  in 
particular markets or for specific customers; for example, in early 2026, the U.S. Department of War 
suggested it could invoke the Defense Production Act to compel us to remove the limitations we have 
placed on the use of our models for autonomous weapons and mass surveillance;

heightened transparency, documentation, auditing, governance, or human-oversight obligations;

restrictions on the collection, use, transfer, localization, or retention of data used to train or operate AI 
systems, based on intellectual property, privacy, or other frameworks;

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