Grindr Inc.

Current report

We use artificial intelligence and machine learning in our products, services, and operations, which may result in operational and compliance challenges, legal liability, reputational concerns, cybersecurity risks, competitive risks, and regulatory concerns that could materially and adversely affect our business and results of operations.

Current report

We have adopted and are continuing to develop AI/ML technologies, processes, and algorithms—including generative AI—into our daily operations, including by deploying generative AI and machine learning into our products and services to identify and eliminate spam and bad actors, to provide new features, to improve user connections, and to streamline internal operations like customer support. This may result in adverse effects on our operations, legal liability exposure, reputation, and competitive dynamics. The use of AI/ML technologies and processes, including generative AI, at scale is relatively new, and may lead to challenges, concerns, and risks that are significant or that we may not be able to predict, especially if our use of these technologies in our products and services becomes more important to our operations over time.

Current report

AI/ML in our products and services may be difficult to deploy successfully due to operational issues inherent to the nature of such technologies. For example, AI algorithms use machine learning and predictive analytics that may be insufficient or of poor quality and reflect inherent biases and could lead to flawed, biased, and inaccurate results. Due to inaccuracies or flaws in the inputs, outputs, or logic of the AI/ML (including if a bad actor “poisons” the AI/ML with bad inputs or logic), the model could be biased and could lead to decisions that could bias certain individuals (or classes of individuals) and adversely impact their rights; employment; and ability to obtain certain pricing, products, services, or benefits. Deficient or inaccurate recommendations, forecasts, or analyses that generative AI applications assist in producing, including in certain of our offerings such as More Profiles, For You, and Discover, each of which leverages AI and ML to display profiles to users based on relevancy, could lead to customer rejection or skepticism of our products, impact our ability to attract and retain users, affect our reputation or brand, and negatively affect our financial results. Further, unauthorized use or misuse of generative AI by our staff or others may result in disclosure of confidential company and customer data, reputational harm, privacy law violations and legal liability. While we generally seek to obtain contractual commitments from the applicable providers that prohibit the use of our and our users' data to train or refine their large language models, we may not be able to implement technical measures to prevent such providers from doing so in contravention to their contractual obligations. Our use of AI/ML technologies and generative AI may also lead to novel and urgent cybersecurity risks, including the misuse or disclosure of personal data, which may adversely affect our operations and reputation.

Current report

We face significant competition in respect to AI-based products and services. If we are unable to provide enhancements and new features for our AI/ML products and services or to develop new products and services that achieve market acceptance and that keep pace with rapid technological developments and evolving industry standards, our business would be materially and adversely affected. The failure of our technology, products, or services to gain market acceptance due to more attractive offerings by our competitors or the introduction of new competitors to the market with new or innovative product offerings could significantly reduce our revenues; increase our operating costs; or otherwise materially and adversely affect our business, financial condition, results of operations and cash flows.

Current report

Moreover, the development and use of AI/ML, including generative AI, are subject to privacy and data security laws, as well as increasing regulatory, legal, and consumer scrutiny. Additionally, certain privacy laws extend rights to consumers (such as the right to delete certain personal data) and regulate automated decision making, which may be incompatible with our use of AI/ML. These obligations may make it harder for us to use AI/ML; lead to regulatory fines or penalties; result in additional compliance costs, regulatory investigations, and actions; require us to change our business practices, retrain our AI/ML, prevent or limit our use of AI/ML; or result in consumer or other lawsuits. For example, the Federal Trade Commission has required other companies to turn over (or disgorge) valuable insights or trainings generated through the use of AI/ML where they allege the company has violated privacy and consumer protection laws.

Current report

We are increasingly using AI/ML to enhance our products and services, including by training or tuning models using data collected through user interactions. These activities may expose us to regulatory, legal, and reputational risks, particularly with respect to the repurposing of personal data for AI/ML training. Identifying an appropriate legal basis and, where required, obtaining valid and informed consent for such processing presents significant compliance challenges across the multiple jurisdictions in which we operate. The complex interplay between data protection, consumer protection, and emerging AI regulatory frameworks introduces legal uncertainty and may require continuous reassessment of our practices. Furthermore, our data practices, particularly with respect to sensitive or special category data, in connection with user interactions and AI/ML have in the past attracted and may continue to attract scrutiny from consumer advocacy groups, regulatory authorities, and other stakeholders, and could result in reputational harm, enforcement actions, or litigation. In particular, there is a risk that such practices could give rise to regulatory actions, class action claims, or mass complaints alleging unfair, deceptive, or unlawful data processing.

Current report

Uncertainty in the legal and regulatory regime relating to AI/ML and emerging ethical issues surrounding the use of these technologies may require significant resources to modify and maintain business practices to comply with U.S. and non-U.S. laws, the nature of which cannot be determined at this time. Several jurisdictions around the globe, including Europe and certain U.S. states, have already proposed or enacted laws governing the use of AI/ML. For example, the European Union’s Artificial Intelligence Act (“AI Act”), which has an extraterritorial reach and bans AI applications that pose an unacceptable level of risk and establishes obligations for AI providers and organizations developing or deploying AI systems. The AI Act provides for fines of up to 35 million Euro or 7% of annual global revenue for violations of the prohibited AI restrictions, and fines of up to 15 million Euro or 3% of annual global revenue for violations of most other obligations. We expect other jurisdictions will adopt similar laws (e.g., Brazil). More restrictive legislation may render the use of AI/ML technologies challenging, and existing laws and regulations may apply to us or our vendors in new ways. We may experience challenges in adapting our operations and services to such legislation, if applicable.

Current report

We often rely not only on our own initiatives and innovations but also on third parties for the development of and access to new technologies related to, or that rely upon, AI/ML, and we therefore rely on development of a robust market for these new products and technologies. Failure to accurately predict or to respond effectively to developments in the AI/ML market may significantly impair our business. In addition, because our products and services are designed to operate with a variety of systems, infrastructures, and devices, we need to continuously modify and enhance our products and services to keep pace with changes in technologies related to, or that rely upon, generative AI created or provided by third parties. Any failure of our products and services to continue to operate effectively with third-party infrastructures and technologies could reduce the demand for our products and services, result in dissatisfaction of our customers, and materially and adversely affect our business.