Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 467

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 1A
Chunk 467
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 we may not be able to complete the process successfully. Failure to adequately manage these risks could result in operational disruptions,
legal liabilities, and adverse impacts on our business, results of operations, and financial condition.

Impact of advancements in artificial intelligence
on demand for AI and HPC data centers may reduce the need for high-performance computing (HPC) and AI-specific data center infrastructure,
which could have an adverse effect on our business, results of operations, and financial condition.

The AI industry is rapidly
evolving, with continuous improvements in algorithms, software efficiencies, and hardware capabilities. Emerging AI technologies, such
as demonstrated by DeepSeek, may allow for complex AI operations to be executed with significantly less computing power than is currently
required. This reduction in computational intensity could decrease the demand for specialized compute and HPC data center services. If
AI developers are able to achieve the same or better performance outcomes with more energy-efficient, cost-effective, or less resource-intensive
technologies, they may adjust their need for large-scale, high capacity data center solutions. This shift could have an adverse effect
on our business, results of operations, and financial condition. We continuously monitor industry trends and invest in innovation to mitigate
these risks. However, there is no assurance that we will be able to anticipate or respond effectively to such changes, which could have
an adverse effect on our business, results of operations, and financial condition.

Our cloud services business is subject to
complex and evolving U.S. and foreign laws and regulations regarding AI, machine learning, and automated decision making.

In recent years the use of
machine learning, AI and automated decision making, has come under increased regulatory scrutiny, and governments and regulators in the
United States, European Union, and other places have announced the need for greater regulation regarding the use of machine learning and
AI generally. New laws, guidance, and decisions in this area may limit WhiteFiber’s cloud services business, or require the company
to make changes to its clouds service technology and infrastructure and our operations that may decrease our operational efficiency, result
in an increase to operating costs and/or hinder our ability to improve our cloud services.

24

For example, certain global
privacy laws regulate the use of automated decision making and may require that the existence of automated decision making be disclosed
to the data subject with a meaningful explanation of the logic used in such decision making in certain circumstances, and that safeguards
must be implemented to safeguard individual rights, including the right to obtain human intervention and to contest any decision.