Company: AFRM
Filing Date: 2025-08-28
Form Type: 10-K
Source: 0001820953-25-000080
Chunk: 52

Company: Affirm Holdings, Inc.
Filing Date: 2025-08-28
Form: 10-K
Item: Item 1A
Chunk 52
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 to make payments under the agreements in proportion to the loan underperformance, which may have a material adverse effect on our business, results of operations, financial condition, and our relationships with existing and prospective third-party loan buyers.

Our use and provision of generative AI-powered solutions could lead to operational or reputational damage, competitive harm, legal and regulatory risk and additional costs.

We currently use and expect to continue to use generative AI, a relatively new and emerging technology in the early stages of commercial use, in certain aspects of our business, including our customer service chatbot, which could expose us to additional risks. Generative AI may create inaccurate, incomplete or misleading outputs, reflect unintended biases, or produce other discriminatory or unexpected results, errors or inadequacies, any of which may not be easily detectable. While we have processes and controls in place designed to mitigate the risks associated with using generative AI, including human involvement in the training and monitoring of our AI tools and the alignment of our AI development policies and procedures with guidelines for secure development practices, if the content, analyses, or recommendations that generative AI assists in producing or our products and services are, or are perceived to be, deficient, inaccurate, biased, unethical or otherwise flawed, our reputation, competitive position and business may be adversely affected and we may incur additional costs, including in the form of damages or fines. 

To the extent that we do not have sufficient rights to use the data used in, or produced by, the AI tools employed in our business and operations, we may be subject to litigation by the owners of the content or other materials that comprise such data. Further, any content or other output created by us using AI-powered tools may not be subject to copyright protection, which may adversely affect our ability to enforce the intellectual property rights in such content. We have implemented policies and procedures designed to mitigate these risks, including reviewing vendor terms and monitoring AI outputs for potential infringement. However, these measures may not be sufficient to prevent all instances of infringement or loss of IP rights, The rapidly evolving regulatory landscape surrounding AI technologies presents additional risks. New or proposed legislation and regulations across various jurisdictions may impose significant compliance burdens, restrict certain AI applications, or require specific governance frameworks for AI systems. The cost to comply with such laws or regulations could be significant and may increase our operating expenses. Our failure to comply with current or future AI regulations could result in significant penalties, reputational damage, and limitations on our ability to deploy AI-powered solutions. Additionally, we may face challenges in ensuring our