Artificial intelligence

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The Company competes with a number of companies in the development and deployment of artificial intelligence and has made significant investments in building artificial intelligence features and related infrastructure across its products and services. Failure to successfully develop, deploy or differentiate artificial intelligence capabilities, or to do so as quickly or cost-effectively as competitors, could result in loss of market share, erosion of competitive positioning, and inability to attract or retain customers and talent.

Read in the 10-K filed Nov 3, 2026 ↗

The Company’s business, including its artificial intelligence and machine learning offerings, also depends on access to sufficient compute capacity and storage resources. Demand for cloud compute and storage services and other artificial intelligence infrastructure has increased substantially across the technology industry, resulting in constrained supply, extended lead times, and increasing costs. In addition to its own data center infrastructure, the Company relies on third-party cloud service providers to meet these compute and storage needs. There are limited third-party providers that can reliably meet such demand, and the Company may be unable to secure sufficient capacity on commercially reasonable terms, or at all, to meet customer demand. Investment in data center capacity involves significant expenditures and long-term commitments, including for components and equipment, which increase the Company’s capital expenditures, liabilities and obligations. The ability of the Company and its third-party providers to timely build, expand and operate data centers is subject to operational challenges and other external factors, including restrictions on international trade, supply chain constraints, access to financing, construction delays, the availability of power, water and land, labor shortages, public sentiment, as well as existing and evolving laws governing the permitting, zoning, operation and taxation of data centers. In addition, new or expanding environmental regulations could increase the costs associated with operating and expanding the Company’s or its third-party providers’ data center infrastructure or limit the ability to expand in certain jurisdictions. Data center operations are also subject to risks related to power transmission and other utility outages, telecommunications and network failures, cybersecurity attacks, and other interruptions outside the Company’s control. If the Company is unable to obtain and maintain adequate compute capacity and storage resources in a timely manner or at commercially reasonable rates, this can limit the functionality and availability of the Company’s products, services and features, delay the deployment of new features or offerings, or cause the Company to incur significantly higher costs. In addition, the Company may overestimate or underestimate requirements, which could result in higher-than-expected costs for the Company or an inability to fully satisfy customer demand or expectations.

Read in the 10-K filed Nov 3, 2026 ↗

Third-party developers may also engage in fraudulent, deceptive or illegal conduct that could harm the Company’s business, customers and reputation. Despite the Company’s significant investment in review processes, security measures and other controls designed to prevent abuse of its platforms, some third-party developers have engaged, and may in the future engage, in fraudulent activity or other illegal or improper behavior and the Company may not be able to timely or effectively prevent, detect or remediate such conduct. These risks may be exacerbated by the use of artificial intelligence by bad actors seeking to circumvent the Company’s review processes, security measures and other controls. Any such conduct, or the perception that the Company has failed to adequately prevent, detect or respond to such risks, could damage customer trust and the Company’s brand and reputation, result in a decline in customer use of the Company’s products and services, and subject the Company to litigation, regulatory investigations, fines or other legal liability.

Read in the 10-K filed Nov 3, 2026 ↗

The rapid advancement and widespread dissemination of artificial intelligence technologies significantly increases the risks associated with cybersecurity attacks. For example, artificial intelligence technologies are producing highly targeted phishing campaigns, automating the discovery or exploitation of vulnerabilities, generating deepfake content designed to bypass authentication protocols, and identifying and exploiting vulnerabilities at a greater scale and at a highly accelerated pace. As increasingly sophisticated and capable artificial intelligence models continue to become available, these risks are intensifying. Sophisticated and widespread cybersecurity attacks pose substantial systemic risks, such as cascading failures across interconnected systems, and potential disruptions to critical infrastructure and market stability. In addition, artificial intelligence technologies are themselves susceptible to security threats, and the development, deployment and use of artificial intelligence by the Company, its employees and its suppliers exposes the Company to additional vulnerabilities and attacks.

Read in the 10-K filed Nov 3, 2026 ↗

Issues related to artificial intelligence may result in reputational, competitive and financial harm to the Company, regulatory action, legal liability, and other adverse effects to the Company’s business.

Read in the 10-K filed Nov 3, 2026 ↗

Artificial intelligence technologies are increasingly integrated into the Company’s products and services and its business and operations. These technologies present emerging legal, regulatory, ethical and operational risks.

Read in the 10-K filed Nov 3, 2026 ↗

For example, the Company’s artificial intelligence efforts may give rise to risks related to, among other things: competition and strategy; recouping costs and returns on investments; product liability; intellectual property infringement; data privacy; cybersecurity; sanctions and export controls; unauthorized access to or inadvertent releases of confidential information or other unexpected access to or use of user information; exposing users to harmful, inaccurate or other negative content or experiences; unintended or unauthorized actions by autonomous or agentic systems; misuse of artificial intelligence by employees and other personnel; changing public sentiment; bias and discrimination; and online safety and protection of minors. While the Company is committed to developing and deploying artificial intelligence responsibly, the Company may be unsuccessful in identifying or resolving all potential issues and failures before they arise. As a result, the Company could be exposed to reputational and competitive harm, regulatory action, legal liability, and other adverse effects to its business.

Read in the 10-K filed Nov 3, 2026 ↗

In particular, artificial intelligence agents and other technologies can take actions autonomously, including interacting with internal or external systems that in some cases they may not be authorized to access, executing or altering code, sending communications, and completing transactions. Such technologies, whether developed or deployed by the Company or by third parties, may behave in unintended or unpredictable ways, including by taking actions that were not directed, instructed or authorized, exceeding permissions, defying directions or resisting instructions, circumventing the Company’s or third parties’ security measures and other controls, or being manipulated or compromised through malicious inputs or by bad actors. In addition, such technologies may conceal actions, hide, withhold or manipulate information, or generate inaccurate or deceptive outputs. Because many of these technologies are nondeterministic, their behavior can be difficult to anticipate, control, test and audit, and errors can compound across multistep workflows. Some consequences, such as deleting data or completing transactions, may be difficult or impossible to reverse. Moreover, the Company’s ability to oversee and control third-party artificial intelligence agents and other technologies may be limited. Artificial intelligence tools may be used in ways that violate the Company’s policies, contractual obligations or applicable laws, produce unintended consequences, or intentionally misuse authorized access, and the Company’s policies and controls may not keep pace with rapidly advancing technologies or prevent or timely detect such misuse.

Read in the 10-K filed Nov 3, 2026 ↗

The divergent and rapidly evolving nature of legal and regulatory frameworks around artificial intelligence and super intelligence and increased scrutiny from lawmakers and regulators create significant uncertainty. The Company may not always be able to anticipate how courts and regulators will apply existing laws and regulations to artificial intelligence, predict how new legal and regulatory frameworks will develop to address artificial intelligence, or otherwise respond to these frameworks as they are still rapidly evolving. The Company may also have to incur significant expenditures to adapt to new legal frameworks and adjust its offerings in certain jurisdictions if the legal frameworks on artificial intelligence are not consistent across jurisdictions. The Company also cannot predict how various laws and regulations related to online services, intermediary liability, and other issues will apply to content generated by artificial intelligence. In addition, the Company is subject to the risks posed by ethical concerns and negative consumer perceptions related to automation, artificial intelligence and super intelligence, including perceived threats to safety or other societal harms or complications.

Read in the 10-K filed Nov 3, 2026 ↗

The Company is involved in lawsuits, many of which claim statutory damages or seek significant changes to its business operations, and the Company anticipates that it will continue to be a target for such lawsuits in the future. Because of the scale of the Company’s user, advertiser, investor and developer bases, the plaintiffs in class action cases filed against the Company typically claim monetary damages even if the alleged per-user or per-entity harm is small or nonexistent. In addition, the Company has faced, and will continue to face, additional class-action and other lawsuits based on various legal theories, including claims related to advertising, antitrust, privacy, security, biometrics, content, algorithms, copyright, user well-being, minors, employment, activities on the Company’s platforms, consumer protection, unfair and deceptive trade practices, or product performance or other claims related to the use of consumer hardware and software, including artificial intelligence products, that are new and unproven. The results of any such lawsuits and claims cannot be predicted with certainty, and any negative outcome could expose the Company to substantial penalties, including monetary damages, fines, injunctive relief, or requirements to change its products, services, or business policies and practices.

Read in the 10-K filed Nov 3, 2026 ↗

AI or machine learning technologies usage by our service providers in their business activities, whether or not known to us, could also expose us to risks. The failure of one or more such service providers to meet our expectations, including by use of AI tools in contravention of agreements with us, inputting our confidential or proprietary information into AI tools, or roll-out of new AI tools without our approval, may have an adverse effect on our operations or financial condition, result in legal or regulatory violations, jeopardize our intellectual property rights or give rise to issues pertaining to data privacy and data protection.

Read in the 10-K filed Aug 31, 2026 ↗

Furthermore, laws and regulations focused on the use and provision of AI or machine learning technologies may impose certain obligations on us and could result in monetary penalties or other regulatory actions. The regulatory framework for AI continues to evolve and is largely unsettled and fast-moving to varying extents in the jurisdictions in which we operate. Uncertainty in the legal regulatory regime relating to AI may require significant resources to modify and maintain business practices to comply with laws, the nature of which cannot be determined at this time. These obligations may make it harder for us to conduct our business using AI, lead to regulatory fines or penalties, require us to change our product offerings or business practices, or prevent or limit our use of AI. If we cannot use AI, or that use is restricted, it could lead to business disruption, our business may be less efficient, or we may be at a competitive disadvantage. Replacement of these technologies with compliant alternatives could require substantial capital expenditures or lead to a loss of proprietary data or historical optimization. Our failure, or perceived failure, to comply fully with developing interpretations of AI or machine learning technologies laws and regulations, or meet evolving and varied stakeholder expectations and industry standards, could harm our business, reputation, financial condition, and operating results.

Read in the 10-K filed Aug 31, 2026 ↗