Company: KARO
Filing Date: 2025-06-09
Form Type: 20-F
Source: 0001213900-25-052372
Chunk: 32

Company: Karooooo Ltd.
Filing Date: 2025-06-09
Form: 20-F
Item: Item 3
Chunk 32
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 trained employees resulting
in significant costs. Variations among communications protocols in the markets in which we operate enhance the risk of error in the remote
installation of firmware. Although we attempt to manage this risk by introducing firmware updates in stages so that the success of deployment
to a small number of telematics devices can be assessed before the installment risk is expanded to a larger customer base, there can be
no assurance that we will be successful in detecting firmware operation and integration problems or otherwise in managing our exposure
to remediation expense related to the deployment of firmware updates.

Our use of AI and generative
AI tools presents risks and challenges that could adversely affect our business and require that we incur substantial costs

We use AI and generative AI tools
in certain of our products, services and operations, including customer service, data analytics, product development and code creation.
AI is a rapidly evolving and disruptive technology and the long-term implications of its use are still uncertain. We expect that the increasing
adoption and use of AI technologies will continue to accelerate and have significant impacts on our business and the industries we serve.
Our competitors may incorporate AI more quickly or successfully and our solutions could become less competitive as a result. AI-related
laws and regulations in the U. S., EU and a variety of other countries and jurisdictions are rapidly evolving and are subject to significant
uncertainty and could impose significant compliance costs, restrict certain AI applications, or require us to alter our AI-related practices.

AI may also produce erroneous
or misleading content and outputs that infringe on the intellectual property or data privacy rights of others. Although we take measures
to address the accuracy and appropriate use of generative AI content, including through internal policies and training, these efforts
may not always be successful. Any failure by our personnel, contractors, or partners to adhere to our policies, or otherwise use AI in
an inappropriate manner, could result in violations of confidentiality obligations and laws or regulations, jeopardize our IP rights,
or expose our products or business systems to defects and malware, any of which could damage our business and result in reputational,
technical, or competitive harm.

Our “over-the-air”
transmission of firmware updates could permit a third party to disable our customers’ telematics devices or introduce malware into
our customers’ telematics devices, which could expose us to customer claims.

“ Over-the-air” transmission
of our firmware updates potentially provides the opportunity for a third party to modify or disable our customers’ operating systems
or introduce malware into our