OpenAI Adds On‑Premise Software Clause to Terms
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- OpenAI added a new "Licensed Materials" section in its Service Terms covering software delivered for on‑premise or private‑cloud deployment.
- Licensed Materials are defined as code, containers, modules, or other packages installed on customer‑managed systems.
- License for these materials is limited, non‑exclusive, non‑transferable, and non‑sublicensable, with no rights to modify or redistribute.
- Termination requires the customer to permanently delete all copies of the Licensed Materials.
- Clause signals a product direction before any formal announcement, indicating OpenAI may be preparing an on‑premise offering.
Why it matters: Enterprises eyeing local AI models now face a concrete compliance hurdle: they must erase every copy of OpenAI's on‑premise software at contract termination, adding a planning step. The clause also signals that OpenAI is preparing an on‑premise offering, potentially opening a new market segment.
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