A phrase is given in the question below, followed by three sentences in which it has been used. Choose the option that indicates the statement(s) where the phrase is used in a contextually and grammatically correct manner.

DARK HORSE

(I) Although the young grandmaster was virtually unknown before the tournament, he proved to be a dark horse by defeating several world champions.

(II) The small tech startup was considered a dark horse in the industry until it unveiled its groundbreaking artificial intelligence platform.

(III) Due to the dense fog at twilight, the driver could barely see the dark horse crossing the narrow country road.

The correct answer is Both (I) and (II).

Meaning of the Idiom:
The phrase "dark horse" is an idiomatic expression referring to a candidate, competitor, or participant about whom little is known, but who unexpectedly wins, succeeds, or shows surprising capability.

Sentence Analysis:

Sentence (I): "Although the young grandmaster was virtually unknown before the tournament, he proved to be a dark horse by defeating several world champions."
This sentence uses the idiom correctly to describe a previously unknown player who achieves unexpected success against world champions.

Sentence (II): "The small tech startup was considered a dark horse in the industry until it unveiled its groundbreaking artificial intelligence platform."
This sentence uses the idiom correctly to describe a small, overlooked startup that surprisingly emerges as a strong competitor in its field.

Sentence (III): "Due to the dense fog at twilight, the driver could barely see the dark horse crossing the narrow country road."
This sentence uses the words "dark horse" literally to refer to an animal (a horse of a dark color), rather than using the phrase in its established idiomatic sense.

Therefore, the idiom is used contextually and grammatically correctly in both (I) and (II).