Company: WRBY
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001504776-25-000010
Chunk: 42

Company: Warby Parker Inc.
Filing Date: 2025-02-27
Form: 10-K
Item: Item 1
Chunk 42
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 costly, divert management attention, and harm our reputation. The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could adversely affect our reputation, business, financial condition, revenues, results of operations, or cash flows. Any material disruption or slowdown of our systems or those of our third-party service providers and business partners, could have a material adverse effect on our business, financial condition, and results of operations. Our risks are likely to increase as we continue to expand, grow our customer base, and process, store, and transmit increasing amounts of confidential, proprietary and sensitive information.

The use of artificial intelligence could adversely affect our business.

We use artificial intelligence for certain business purposes, including the automation of certain tasks, predicting market trends, and improving our customer experience. We may expand our use of artificial intelligence in other areas of our business, including in customer facing applications.

Issues relating to our use of new technologies such as artificial intelligence may cause us to experience operational disruptions, negative publicity and reputational harm, competitive harm, criminal and civil liability and new or enhanced regulatory scrutiny, and to incur additional costs to resolve such issues. For example, artificial intelligence is based on predictive analytics, which can include unexpected biases and lead to discriminatory outcomes. In addition, if we use PHI for our artificial intelligence technologies, we must have rights and permissions to do so from our customers. If we do not have rights or permissions to use PHI or to de-identify PHI or if we do not de-identify PHI in accordance with HIPAA’s safe harbor method, and use PHI or de-identified PHI for such purposes, we may be subject to civil and criminal liability or other actions.

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Further, perceived or actual technical, legal, privacy, security, ethical or other issues relating to the use of artificial intelligence could undermine the decisions, predictions, analysis or other output that such tools produce and create additional risks, such as risks of cybersecurity incidents. Additionally, any integration of artificial intelligence in our or our third-party service providers’ operations, products or services is expected to pose new or unknown cybersecurity risks and challenges. Further, use of artificial intelligence platforms by our employees, whether authorized or unauthorized, may increase the risk that our proprietary information will be unintentionally disclosed or undermine our claims to certain intellectual property. Any of the foregoing, as well our failure to responsibly deploy artificial intelligence in our operations or the failure of artificial intelligence systems