Lumen Technologies, Inc.

Current report

Our use of AI in our service offerings and internally subjects us to additional risks.

Current report

We integrate AI into customer-facing offerings such as NaaS, Lumen Connect, programmable connectivity, managed security and digital self-service, and we are deploying AI internally to modernize systems, automate network operations, enhance customer care and improve productivity. Separately, our AI backbone initiative is focused on expanding our network capacity to position Lumen as the infrastructure platform that enables AI-driven networking and data movement. Certain of the AI functionality that is integrated into our service offerings and that we use internally is developed and supplied by third parties, and we have developed certain of our own AI functionalities on top of large language models and other AI tools supplied by third parties. If AI-enabled features we offer our customers do not perform as expected, produce biased, insufficient, or harmful outputs, cause service degradation, or fail to keep pace with our competitors’ AI-native capabilities, we could lose customers and market share, damage our reputation, lose pricing power or be subject to litigation, contractual disputes and adverse regulatory consequences, even if the AI technology we used in our service offering was supplied by a third party and we had no control over its development, defects, functionality, vulnerabilities, or limitations.

Current report

Our internal use of AI also exposes us to the risk of inadvertent disclosure of confidential, proprietary, or customer data, including through the use of AI models or tools that are not appropriately restricted to our environment, reliance on inaccurate or “hallucinated” outputs in business and operational decisions, intellectual property contamination, and violations of evolving employment, privacy, and consumer protection laws, each of which may not be identified or mitigated by our AI governance framework, particularly given the pace and complexity of AI development. Because the AI we use internally and in our service offerings is, in part, supplied by third parties, we are also subject to the risk that our AI service or infrastructure providers limit, withdraw, reprice, or change the terms of these offerings, suffer a service disruption or outage, or their tools contain defects, security vulnerabilities, or infringing content, or become subject to export controls or other restrictions, any of which may cause our ability to deliver AI-enabled services and deploy AI internally to be materially impaired. We also use AI tools, including tools provided by third parties, to develop or assist with developing our own software code, and we may not be able to anticipate or detect security vulnerabilities in such AI-generated software code, which could expose us to cybersecurity risks. For these reasons, our use of AI could materially harm our business, operations, financial condition or reputation.

Current report

Rapid and Uncertain Developments in AI Technology, Regulation, and Market Dynamics May Increase Cybersecurity, Legal, Competitive, and Reputational Risks and Adversely Affect Our Business.

Current report

AI is reshaping our external environment regardless of our own deployment: threat actors increasingly use AI to develop more sophisticated, scalable, and effective cyber‑attacks, social engineering, deepfakes, and fraud directed at our networks, employees, vendors, and customers, often times before patches become available or can be deployed; AI is subject to a rapidly evolving and fragmented patchwork of U.S. federal, state, and international laws and guidance, including the EU AI Act, which can impose significant penalties for breaches, and with which compliance is costly and uncertain across our jurisdictions and our customer segments; the EU Product Liability Directive also covers AI-enabled products and services, subjecting us to civil claims for AI-caused harms; a lack of comprehensive AI legislation in the U.S. subjects us to uncertainty as to whether and how existing state AI laws will apply; AI may enable competitors (including hyperscalers, satellite operators, and non‑traditional entrants) to bypass elements of the traditional network value chain, commoditize services on which we depend, or deliver AI‑native capabilities we cannot match; AI use by us or others may give rise to unsettled claims of copyright, patent, trademark or trade‑secret infringement, or invalidity; and despite certain providers agreeing to indemnify us against intellectual property ("IP") infringement claims, we may not be successful in recovering all or any of our losses, and the law is unsettled as to whether we can obtain, maintain, or enforce IP rights in our content, software code, or other outputs developed with AI; a slowdown or reversal in AI infrastructure investment or in AI-driven demand for network capacity and services could adversely affect our business and public, employee, investor, customer, and governmental scrutiny of AI (including ethics, bias, energy, and water consumption of AI data centers we serve, as well as labor impacts) could harm our reputation, stakeholder relationships, and talent pipeline. Because AI is simultaneously a strategic opportunity, a set of tools we deploy, a category of third‑party inputs we depend on, and an outside force reshaping our industry, these risks are interrelated and may compound one another, and the materialization of one or more could have a material adverse effect on our business, financial condition, results of operations, cash flows, reputation, and prospects.

Current report

Economic, political, and market conditions may adversely affect our business, financial condition, and results of operations.

Current report

Our business, financial condition, and operating results are affected by changes in general economic and political conditions, including interest rates, economic growth, recessions, or slowing growth, higher unemployment, changes or uncertainty in fiscal or monetary policy, tariffs and trade restrictions, fluctuations in global currencies, energy costs, rates of inflation (or concerns about deflation), supply chain disruptions, impacts of current geopolitical conflict or instability, such as the Ukraine-Russia, Israel-Hamas and Iran conflicts and any further escalations thereof, and other macroeconomic factors. Rising prices for goods, services, and labor due to inflation, including inflation resulting from higher tariffs, higher fuel costs, trade restrictions, and other economic disincentives to trade, could adversely impact our margins and growth. Weak economic and credit conditions may adversely affect our suppliers and other third-party partners, as well as our Business and government customers, some of which may file for bankruptcy, or may experience cash flow or liquidity problems, or may be unable to obtain or refinance credit such that they may no longer be able to operate. Any of these could adversely impact our business, financial condition and results of operations.