Company: PHR
Filing Date: 2025-09-05
Form Type: 10-Q
Source: 0001412408-25-000062
Chunk: 330

Company: Phreesia, Inc.
Filing Date: 2025-09-05
Form: 10-Q
Item: Part I, Item 2
Chunk 330
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 economic terms with the applicable providers. If any such third-party AI technologies become incompatible with our products and programs or unavailable for use, or if the providers of such models unfavorably change the terms on which their AI technologies are offered or terminate their relationship with us, our products may become less appealing to our clients and our business may be adversely affected. In addition, to the extent any third-party AI technologies are used as a hosted service, any disruption, outage, or loss of information through such hosted services could disrupt our operations or solutions, damage our reputation, cause a loss of confidence in our products, or result in legal claims or proceedings, for which we may be unable to recover damages from the affected provider.

A growing number of legislators and regulators are adopting laws and regulations and have focused enforcement efforts on the adoption of artificial intelligence and the use of such technologies in compliance with ethical standards and societal expectations. These developments may increase our compliance burden and costs in connection with the use of artificial intelligence and lead to legal liability if we fail to meet evolving legal standards or if use of such technologies results in harms or other causes of action we did not predict. For example, beginning January 1, 2026, two new state laws – California’s Generative Artificial Intelligence: Training Data Transparency Act (“AB 2013”) and the Texas Responsible Artificial Intelligence Governance Act (“TRAIGA”) – will impose novel requirements on AI developers and users. AB 2013 requires public disclosure of detailed information about the training data used in generative AI models, which, if applicable to us, may impact the confidentiality of proprietary information and could affect our competitive position. TRAIGA establishes broad obligations for both developers and deployers of AI systems, including civil rights protections, regulatory oversight, and the creation of an AI governance council. In addition, the Colorado Artificial Intelligence Act, set to take effect in February 2026, will regulate AI systems that make consequential decisions and closely aligns with the EU AI Act in its scope and structure. These state-level initiatives reflect a growing trend toward AI regulation in the absence of federal legislation. As a result, we may face a fragmented and evolving compliance landscape that could increase operational complexity, regulatory scrutiny, and legal exposure associated with our use or development of AI technologies.

In addition, our competitive position could be harmed if we fail to adopt and integrate AI effectively into our operations and product offerings. While we believe that AI technologies present opportunities for improving our operations and enhancing our product offerings, the successful implementation of AI technology requires significant investment in talent