Company: ALGN
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001097149-25-000064
Chunk: 115

Company: ALIGN TECHNOLOGY INC
Filing Date: 2025-08-06
Form: 10-Q
Item: Item 1A
Chunk 115
---
 business, financial performance, growth, and stock price may be adversely impacted.

We have been incorporating and continue to work to further incorporate AI technologies into our products, services and IT systems. Implementation of AI and machine learning technologies may result in legal and regulatory risks, reputational harm or have other adverse consequences to our business.

We have and are continuing to incorporate AI, including machine learning and independent algorithms, in certain of our products, services and IT systems, which is intended to enhance their operation and effectiveness internally and for our customers, consumers and suppliers. There can be no assurance that we or our customers will realize the expected benefits from these investments. AI innovation presents risks and challenges that could impact our business. Our, or our vendors’, AI algorithms may be flawed. Our datasets or AI training algorithms may be insufficient or contain biased information. 

Additionally, many countries and regions, including the EU, have proposed new and evolving regulations related to the use of AI and machine learning technologies. In Europe, the EU AI Act entered into force on August 1, 2024 which will become fully effective on August 2, 2026, with some provisions effective in February 2025. Other jurisdictions are considering similarly focused legislation. Although we do not engage in developing or providing AI systems for which their placement on the market, putting into service, or use would qualify as “prohibited AI practices,” restrictions and obligations under this regulation, to the extent applicable to us, could have a negative impact on our business, global systems, financial condition and results of operations. Additionally, other jurisdictions have proposed, and in certain cases enacted, laws and regulations addressing aspects of the use and development of AI. The evolving AI regulatory environment may, among other impacts, result in:

•inconsistencies among AI regulations and frameworks across jurisdictions; 

•onerous compliance, governance, research and development obligations that may require us to rework or reevaluate improvements to be compliant or result in the development of products that are unacceptable under new or revised regulatory frameworks; 

•increased risk of regulatory enforcement and litigation related to our AI models; 

•increased liability related to the use of AI by our customers, consumers or suppliers that are beyond our control; 

•delays in the deployment of new products and services; 

•competitive and reputational harm; and 

•increased cybersecurity risks. 

The input of confidential information or trade secrets into AI systems may result in the loss of intellectual property, proprietary rights or attorney-client privilege in such information or trade secrets.