Risk factor changes · GOOGL

What changed in Alphabet's risk factors

Item 1A (Risk Factors) of Alphabet's FY2025 10-K compared with its FY2024 10-K, sentence by sentence.

Newer: 10-K filed 2026-02-05 · Older: 10-K filed 2025-02-05

New in the latest 10-K 58

• We believe AI is quickly reshaping the advertising industry, including how ads are delivered online, and we and our competitors are constantly adjusting to meet this shift and provide new and evolving advertising formats.
• There is no assurance that we will adapt effectively and competitively to meet this shift, and that such advertising formats, strategies, and offerings will be successful.
• To meet the compute capacity demands of AI training and inference, as well as traditional cloud computing services, we are entering into significant leasing arrangements with third party operators, which may increase costs and operational complexity.
• We also have a number of large, long-duration commercial agreements, which could increase our liabilities and obligations in the event of nonperformance by us, our counterparties, or vendors.
• In such nonperformance or an industry downturn, we may incur additional liabilities, have excess capacity that we cannot easily redeploy, and not receive payments from our counterparties or customers.
• For example, with the rise of AI in recent years, we have increasingly focused our investments in building powerful AI tools and AI enhancements to our existing products and services to better cater to our users, customers, and other partners.
• We are developing frontier generative AI models and building AI capabilities into products and services across the company, tailoring them to the evolving preferences of our users and customers.
• Additionally, other companies may develop 10.
• We may experience downward pressure on our operating margin resulting from a variety of factors.
• These include increasing costs for many aspects of our business resulting from a higher level of investment in technical infrastructure, increasing regulations, and increasing competition.
• Certain of our costs and expenses are relatively fixed and may not correlate to changes in revenue, and we may also not be able to continue to drive efficiencies at the rate we have in the past.
• If this happens, we could lose protection for this trademark.
• Table of Contents Alphabet Inc. new and innovative products and services that better serve the needs of our users, advertisers, customers, content providers, and other partners.
• Our ability to scale our technical infrastructure is increasingly constrained by the availability of power, water, and land.
• For example, energy supply is constrained globally due to the significant increase in demand for and limited availability of energy to power AI compute.
• Securing this capacity involves entering into complex, long-lead-time arrangements.
• Additionally, manufacturing and supply of servers and network equipment for our technical infrastructure, particularly for specialized AI chips, is limited to a small number of qualified suppliers.
• Extended or unforeseen disruptions at these suppliers could impact our ability to meet customer demand.
• Failure to secure sufficient capacity in a timely manner would limit our ability to train models and serve Cloud customers.
• In addition, quality issues with equipment used in our technical infrastructure could constrain our capacity to support the delivery and continued development of our products and services.
• Disruptions in our ability to access future financing or manage our indebtedness could adversely affect our ability to execute our strategy and harm our financial condition.
• We may from time to time access capital markets for debt or seek to enter into other forms of financing, such as leases.
• Any difficulty in accessing capital markets, entering into other forms of financing on favorable terms, or managing our existing indebtedness could increase our costs of financing and restrict our ability to invest in our business.
• Furthermore, the combination of our current and any future indebtedness, including obligations arising under 13.
• Table of Contents Alphabet Inc. leases, backstops, guarantees, and potential liabilities from large commercial agreements, could harm our financial condition and reduce our financial and business flexibility.
• Changes in fair value on SBC awards are recognized primarily through operating expenses.
• While we invest 14.
• We face legal and regulatory challenges to our efforts to address low-quality content, and our ability to address it may be constrained or made more costly through added compliance requirements.
• We also face other challenges on our platforms, including attempted election interference; fraud, content inappropriate for minors, misleading or deceptive information, and other types of potentially harmful content.
• Table of Contents Alphabet Inc. and other critical infrastructure, which could affect our or other parties' systems.
• Any such developments may also subject us to additional litigation and 16.
• Table of Contents Alphabet Inc. regulatory inquiries, which could result in monetary penalties and damages, divert management's time and attention, and lead to enhanced regulatory oversight.
• Various countries, including Brazil, India, Japan, South Korea, Singapore, and Vietnam, have also enacted or are considering enacting regulations focused on AI.
• In the US, an increasing amount of legislative and regulatory activity regarding AI is taking place at the state level.
• In 2025, state legislatures considered more than 1,000 AI-related bills, including on fundamental model research and development, synthetic media, algorithmic decision-making, and many others, and took a variety of approaches to AI regulation.
• For instance, in 2025, California and New York passed the Transparency in Frontier Artificial Intelligence Act and the Responsible AI Safety and Education Act, respectively, each of which imposes safety and reporting obligations on developers of frontier models.
• At the same time, the White House's Executive Order, Removing Barriers to American Leadership in Artificial Intelligence, prioritizes deregulation, while its AI Action Plan emphasizes accelerating American innovation leadership. 17.
• The scope of the text and data mining exception is being challenged before courts in the EU, which could harm some aspects of our business.
• Additionally, new regulations apply to online child safety, including access and content restrictions as well as other limitations for minors, which may also conflict with rights of free expression and access to information.
• For instance, AI's energy and water demands have made efforts to reduce our emissions more complex and challenging across every level.

Reworded 171

Removed words are struck through; added words are highlighted.

• Our operations and financial results are subject to various risks and uncertainties, including but not limited to those described below, which could harm our business, reputation, financial condition, and operating results, and may affect the trading price and price volatility of our Class A and Class C stock.
• Reduced spending by advertisers, a loss of partners, or shifts in online advertising, new and evolving advertising formats, or new or existing technologies that block ads online and/or or affect our ability to personalize ads could harm our business.
• We generated more than 75% 70% of total revenues from online advertising in 2024. 2025.
• These partners may not continue to do business with us if we do not create more value (such as increased numbers of users or customers, new sales leads, increased brand awareness, or more effective 10. monetization) than their available alternatives.
• Table of Contents Alphabet Inc. monetization) than their available alternatives.
• Changes to our advertising policies and data privacy practices, such as our initiatives related to third-party cookies, including our announcement in July 2024 to move from phasing out all third-party cookies to a proposed user choice model (which remains subject to continuing discussions with regulators), as well as changes to other companies companies' advertising and/or or data privacy practices have in the past, and may in the future, affect the advertising services that we are able to provide.
• In addition, technologies have been developed that make personalized ads more difficult, or that block the display of ads altogether, and some providers of online services have integrated technologies that could potentially impair the availability and functionality of third-party digital advertising.
• In addition, expenditures Expenditures by advertisers tend to correlate with overall economic conditions.
• To compete successfully, we must accurately anticipate technology developments and deliver innovative, relevant relevant, and useful products, services, and technologies in a timely manner.
• We must continue to invest significant resources in technical infrastructure infrastructure, including the development of our custom TPUs, and R&D, research and development, including through acquisitions, in order to enhance our technology, products, and services.
• They can use their experience and resources in ways that could affect our competitive position, including by making acquisitions and entering into other strategic arrangements; continuing to invest heavily in technical infrastructure, R&D, research and development, and in talent; initiating intellectual property and competition claims (whether or not meritorious); and continuing to compete for users, advertisers, customers, and content providers.
• AI technology and services are highly competitive, rapidly evolving, and require significant investment, including technical infrastructure, development development, and operational costs, to meet the changing needs and expectations of our existing users and attract new users. costs.
• Additionally, other companies may develop AI products and technologies that are similar or superior to our technologies or more cost-effective to develop and/or or deploy.
• As new and existing technologies continue to develop, competitors and new entrants may be able to offer experiences that are, or that are perceived to be, substantially similar to or better than ours. ours, and the consumers may change how they obtain information online, potentially reducing the utility of our existing products and services.
• Competitors Competitors' success in providing compelling products and services or in attracting and retaining users, advertisers, publishers, customers, and content providers could harm our financial condition and operating results.
• Our ongoing increasing investment in new businesses, products, services, and technologies is inherently risky, and could divert management attention and harm our business, financial condition, and operating results.
• We have invested and expect to continue to invest expand our investment in new businesses, products, services, and technologies in a wide range of industries beyond online advertising.
• Table of Contents Alphabet Inc. The investments that we are making across our businesses such as building AI-optimized infrastructure, including our custom TPUs, and integrating AI capabilities into new and existing products and services, services reflect our ongoing efforts to innovate and provide products and services that are helpful to users, advertisers, publishers, customers, and content providers. providers, and distribution partners.
• Our investments ultimately may not be commercially viable or may not result in an adequate return of capital and, in pursuing new strategies, we may incur unanticipated liabilities.
• We have invested significantly and expect to continue to invest significantly in expand our investment in property and equipment, including our technical infrastructure, and we expect these assets to benefit our business over their estimated useful lives.
• Changes in facts and circumstances such as changes to ongoing business operations, changes in the planned use and utilization of assets, and/or technological historical asset performance, expected technology advancements, and future network deployment plans could indicate a change in the period over which we expect to benefit from the asset and impact our financial condition and operating results.
• Innovations in our products and services could also result in changes to user and customer behavior and affect our revenue trends.
• These endeavors involve significant risks and uncertainties, including diversion of resources and management attention from current operations, different monetization models, and the use of alternative investment, governance, or compensation structures that may fail to adequately align incentives across the company or otherwise accomplish their objectives. 9.
• Within Google Services, we continue to invest heavily in devices, including our smartphones, home devices, and wearables, which is a highly competitive market with frequent introduction of new products and services, rapid adoption of technological advancements by competitors, increased market saturation in developed countries, short product life cycles, evolving industry standards, continual improvement in performance characteristics, and price and feature sensitivity on the part of consumers and businesses.
• There can be no assurance we will be able to provide devices that compete effectively.
• Within Google Cloud, we devote significant resources to develop and deploy our enterprise-ready cloud services, including Google Cloud Platform and Google Workspace, and we are advancing our AI platforms and models to support these tools and technologies. technologies, including the development of our custom TPUs and how we deliver them to our customers.
• We are incurring significant and increasing costs and new liabilities, including contingent liabilities, to build and maintain infrastructure to support cloud computing services, invest in cybersecurity, and hire talent, particularly to support and scale our sales force. talent.
• At the same time, Meanwhile, our competitors are rapidly developing and deploying cloud-based services. services and capacity.
• Pricing, including platform switching costs, are challenging across the industry, Pricing and delivery models models, which are subject to increasing regulatory scrutiny and requirements, are competitive and constantly evolving, and we may therefore not achieve our business objectives.
• Further, our business with financial services, healthcare, and public sector customers may present additional risks, including regulatory compliance risks.
• For instance, we may be subject to government audits and cost reviews, and any failure to comply or any deficiencies found may expose us to legal, financial, and/or and reputational risks.
• Evolving laws and regulations may require us to make new capital investments, build new products, and seek partners to deliver localized services in other countries, and we may not be able to meet sovereign operating requirements.
• Within Other Bets, we are investing significantly in areas such as health, life sciences, sciences and transportation, among others.
• These investment areas face intense competition from large, experienced, and well-funded competitors, and our offerings, many of which involve the development of new and emerging technologies, may not be successful, or be able to compete effectively or operate at sufficient levels of profitability.
• In addition, new and evolving products and services, including those that use AI, raise ethical, technological, legal, regulatory, and other challenges, which may negatively affect could harm our brands and demand for our products and services.
• Because all of these investment areas are inherently risky, no assurance can be given that such strategies and offerings will be successful or will not harm our reputation, financial condition, and operating results.
• Our revenue growth rate could decline over time as a result of a number of factors, including changes in customer usage and demand for our existing products and increasing demand for competing technologies; changes in the devices and modalities used to access our products and services; changes in geographic mix; deceleration or declines in advertiser spending; competition; changes in customer usage and demand for our existing products and increasing demand for new technologies; decreases in the pricing of our products and services; ongoing product and policy changes; and shifts to lower priced products and services.
• In addition, we We may experience downward pressure on our operating also face margin resulting compression from a variety of factors, such as an increase in the mix of lower-margin products and services, in particular from the continued expansion of our business into new fields, including products and services such as our devices, Google Cloud, our devices, and consumer subscription products, as well as significant investments in Other Bets, all of which may have margins lower than those we generate from advertising. Bets.
• In particular, For instance, margins on our devices have had, and may continue to have, an adverse effect on our consolidated margins due to pressures on pricing pressures and higher cost of sales.
• Also, the efforts we have taken and may take in the future to protect our proprietary rights rights, including obtaining copyright and patent protections for our important innovations, including AI innovations, may not be sufficient or effective.

Removed since the previous 10-K 50

• We are expanding our investment in AI across the entire company.
• This includes generative AI and continuing to integrate AI capabilities into our products and services.
• The investments that we are making across our businesses, such 11.
• We may also experience downward pressure on our operating margins from increasing regulations, increasing competition, and increasing costs 12.
• Table of Contents Alphabet Inc. for many aspects of our business, including higher level of investment in technical infrastructure.
• Further, certain of our costs and expenses are generally less variable in nature and may not correlate to changes in revenue.
• We may also not be able to continue to execute our efficiency efforts successfully or in a timely manner.
• Although we seek to obtain patent protection for our innovations, it is possible we may not be able to protect some of these innovations.
• Moreover, we may not have adequate patent or copyright protection for certain innovations that later turn out to be important.
• Some courts have ruled that "Google" is a protectable trademark, but it is possible that other courts, particularly those outside of the U.S., may reach a different determination.
• If this happens, we could lose protection for this trademark, which could result in other people using the word Google to refer to their own products, thus diminishing our brand.
• Also, protecting our intellectual property rights is costly and time consuming.
• We face a number of risks related to manufacturing and supply chain management, which could affect our ability to supply both our products and our services.
• For instance, because certain of our hardware supply contracts have volume-based pricing or minimum purchase requirements, if the volume of sales of our devices decreases or does not reach projected targets, we could face increased materials and manufacturing costs or other financial liabilities that could make our products more costly per unit to manufacture and harm our financial condition and operating results.
• Foreign Corrupt Practices Act, and other local laws prohibiting certain payments to government officials, violations of which could result in civil and criminal penalties; and different employee/employer relationships; different labor laws, regulations, and labor practices; and other challenges caused by distance, language, local expertise, and cultural differences, increasing the complexity of doing business in multiple jurisdictions.
• In addition, 16.
• We also face other challenges on our platforms, including violations of our content guidelines involving incidents such as attempted election interference; activities that threaten the safety and/or well-being of our users, including minors, on- or off-line; and the spreading of misinformation or disinformation.
• It may also subject us to litigation and regulatory actions, which could result in monetary penalties and damages and divert management s time and attention.
• Table of Contents Alphabet Inc.
• In the U.S., there is increasing uncertainty as to the federal government's approach to AI regulation going forward, as the continued applicability of the White House's 2023 Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence, which lays out a framework for the U.S. government, among other things, to monitor private sector development of certain foundation models, remains subject to regulatory development.
• Several states are considering enacting or have already enacted regulations concerning the use of AI technologies, including those focused on consumer protection, and depending on the scope of AI regulation at the federal level, some states may move to regulate AI model development and deployment.
• Further, at the federal and state level, there have been various proposals (and in some cases laws enacted) addressing deepfakes and other AI-generated synthetic media.
• Additionally, legislators are increasingly focused on regulating online child safety, including content protections for minors under eighteen years of age.
• Our development, use, and commercialization of AI products and services (including our 19.
• District Court for the District of Columbia ruled that Google violated such antitrust laws.
• The Court is holding a separate proceeding to determine remedies, which could include alterations to our products and services and our business models and operations, including structural remedies, and/or our distribution arrangements, among other changes.
• While we plan to appeal, there can be no assurance that our appeal will succeed, or that we will be able to change or decrease the severity of any remedies that may be ordered, and any or all of these potential remedies could harm our business, reputation, financial condition, and operating results.
• Also, in December 2023, a California jury delivered a verdict in Epic Games v.
• Google finding that Google violated antitrust laws relating to Google Play's business.
• The presiding judge issued a remedies decision in October 2024 that ordered a variety of alterations to our business models and operations and contractual agreements for Android and Google Play.
• Furthermore, in December 2020, several State Attorneys General, led by the Texas Attorney General, filed an antitrust lawsuit in the U.S.
• District Court for the Eastern District of Texas alleging that Google violated antitrust and other laws relating to its advertising technology.
• This case is set for trial in March 2025, and we could face significant civil penalties.
• Trial in the DOJ matter concluded in September 2024 with a decision expected in early 2025.
• If we are unsuccessful, we could face an order on remedies that could harm our business, reputation, financial condition, and operating results.
• Claims have been brought, and we expect will continue to be brought, against us for 20.
• Senate in 2024, and similar U.S. state laws related to children s privacy, such as the New York Child Data Protection Act, and the United Kingdom s Age-Appropriate Design Code); and (4) laws regulating internet-connected devices (such as, in California, the Internet of Things Security Law).
• Table of Contents Alphabet Inc.
• International Trade Commission (ITC) for exclusion and cease-and-desist orders.
• Table of Contents Alphabet Inc. regimes.

Source: SEC EDGAR filings, compared sentence by sentence by EdgarStack. Sentence matching is automated and may pair or split passages imperfectly; check the linked filings before relying on any passage. A software tool, not financial advice. Not affiliated with the U.S. Securities and Exchange Commission.