Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 472

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 1A
Chunk 472
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 our offerings and our business in general to grow. AI presents risks and challenges
that could affect its adoption, and therefore our business. AI algorithms or training methodologies may be flawed. Datasets may be overbroad,
insufficient, or contain biased information. Content generated by AI systems may be offensive, illegal, or otherwise harmful. Ineffective
or inadequate AI development or deployment practices by others could result in incidents that impair the acceptance of AI solutions or
cause harm to individuals, customers, or society, or result in our services not working as intended. Human review of certain outputs may
be required. As a result of these and other challenges associated with innovative technologies, our implementation of cloud services could
subject us to competitive harm, regulatory action, legal liability, including under new proposed legislation regulating AI in jurisdictions,
new applications of existing data protection, privacy, intellectual property, and other laws, and brand or reputational harm. Some AI
scenarios present ethical issues or may have broad impacts on society. If we provide supporting/cloud services that have unintended consequences,
unintended usage or customization by our customers and partners, or are controversial because of their impact on human rights, privacy,
employment, or other social, economic, or political issues, we may experience brand or reputational harm, adversely affecting our business
and consolidated financial statements.

A curtailment or disruption in energy supply
in Iceland or Canada due to regulations and policies implemented by their respective governments, which prioritize energy supply, may
cause a substantial disruption or discontinuance of WhiteFiber’s colocation business operations based in Iceland or Canada, and
therefore impair WhiteFiber’s financial condition or results of operations.

Through
WhiteFiber Iceland ehf, the Company established and has been operating its colocation data center since November 2023, developing cloud
service servers at a data center located in Northern Iceland. Through WhiteFiber’s subsidiary Enovum was acquired in October 2024
and has since been operating its colocation data center located in Canada.

In
order to maintain its HPC data centers operational, WhiteFiber will need to acquire sufficient supplies of electricity generated by hydroelectric
and geothermal energy. In addition, WhiteFiber’s colocation facilities need also to maintain reliable and adequate infrastructure
and cooling systems to ensure optimal performance.

Currently,
Icelandic and Canadian-based data centers and similar facilities, including the ones contracted with the Company, may face significant
risks of energy disruption, curtailment or discontinuance