Company: CNTB
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001835268-25-000058
Chunk: 92

Company: Connect Biopharma Holdings Ltd
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 3
Chunk 92
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 and protection of intellectual property generated by or with the assistance of AI technologies. Regulatory and legal frameworks governing AI-generated inventions are still developing and may create uncertainty regarding our ability to secure and enforce rights in such inventions. Our use of generative AI platforms may lead to novel and urgent cybersecurity and privacy risks, which may adversely affect our operations and reputation, as well as the operations of any third-party collaborators. Emerging ethical issues surround the use of AI, and we may be subject to reputational and legal risk if our deployment or use of AI becomes controversial. Regulators could limit our, or any third-party collaborator’s ability to develop or implement AI-based technologies as part of measures taken against us or any third-party collaborators in particular or as a consequence of broader legislation, which could have an adverse effect on our or any third-party collaborator’s business, results of operations and financial conditions. Several jurisdictions around the globe, including Europe and the U.S., have proposed, enacted, or are considering laws governing the development and use of AI/Machine Learning, such as the EU’s AI Act and the Colorado Artificial Intelligence Act. For example, the EU AI Act, which entered into force on August 1, 2024 and most provisions of which will become effective on August 2, 2026, sets out a risk-based framework, subjecting certain AI technologies to numerous compliance obligations, including transparency, conformity and risk assessment, monitoring and human oversight requirements. Under the EU AI Act, non-compliant companies may be subject to administrative fines of 

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up to 35 million Euros or 7% of a company’s total worldwide annual turnover for the preceding financial year, whichever is the higher. Certain of our activities could subject us to the EU AI Act and depending on how the EU AI Act is implemented and interpreted, we may have to adapt our business practices, contractual arrangements, and services to comply with such obligations. Likewise, in the U.S., several states, including Colorado and California, passed laws to regulate various AI uses, including AI used to make consequential decisions. In addition, various federal regulators have issued guidance and focused enforcement efforts on the use of AI in regulated sectors. The FDA, for example, issued guidance on the use of AI in medical devices, requiring detailed risk management and review processes to obtain approvals. If we develop or use AI systems governed by these laws or regulations, we would need to meet higher standards of data quality, transparency, monitoring and human oversight, and we would need to adhere to specific