title: “Model Licensing and Commercial Usage” parent: “Models For Coding”Key permissions:

  • CommKey permissions:

  • Research and development use
  • Commercial use for smaller organizations
  • Modification and fine-tuning allowed

Key restrictions:

  • Companies with >700M monthly active users need special license
  • Cannot use to improve competing models
  • Must comply with acceptable use policygenerally allowed
  • Modification and research use permitted
  • Distribution with restrictions

Key restrictions:

  • Cannot use for harmful applications (defined in license)
  • Some limitations on high-risk use cases

  • Must include responsible AI use requirements 7

Model Licensing and Commercial Usage Guide

Understanding the licensing terms of AI models is crucial for developers and organizations planning to use local LLMs in their projects. This guide provides detailed information about licensing, commercial usage rights, and compliance considerations.

Why Licensing Matters

When deploying AI models in production environments, licensing determines:

  • Commercial usage rights: Whether you can use the model in commercial products
  • Distribution requirements: How you can share or redistribute the model
  • Attribution obligations: Whether you need to credit the model creators
  • Liability and warranties: Legal protections and responsibilities
  • Modification rights: Whether you can fine-tune or modify the model

License Categories

Permissive Open Source Licenses

These licenses allow broad usage with minimal restrictions:

Apache 2.0 License

Models using this license:

  • Mistral 7B, Mixtral 8x7B, Mistral Small
  • Qwen2.5-Coder family
  • Yi-Coder
  • Granite Code (IBM)

Key permissions:

  • Commercial use allowed
  • Modification and distribution permitted
  • Private use allowed
  • Patent grant included

Requirements:

  • Include license and copyright notice
  • State changes made to the original code
  • Include original license in distributions

Best for: Enterprise deployments, commercial products, redistributed applications

MIT License

Models using this license:

  • Microsoft Phi-3 family (Mini, Small, Medium)

Key permissions:

  • Commercial use allowed
  • Modification and distribution permitted
  • Private use allowed
  • No patent grant (simpler than Apache)

Requirements:

  • Include license and copyright notice in distributions

Best for: Maximum flexibility, simple licensing needs

Custom Open Source Licenses

BigCode OpenRAIL

Models using this license:

  • StarCoder2 family
  • Original StarCoder

Key permissions:

  • Commercial use generally allowed
  • Modification and research use permitted
  • Distribution with restrictions

Restrictions:

  • Cannot use for harmful applications (defined in license)
  • Some limitations on high-risk use cases
  • Must include responsible AI use requirements

Best for: Most commercial applications, with ethical use considerations

Code Llama Custom License

Models using this license:

  • Code Llama family (Base, Instruct, Python)

Key permissions:

  • Research and development use
  • Commercial use for smaller organizations
  • Modification and fine-tuning allowed

Restrictions:

  • Companies with >700M monthly active users need special license
  • Cannot use to improve competing models
  • Must comply with acceptable use policy

Best for: Small to medium businesses, startups, research institutions

DeepSeek Custom License

Models using this license:

  • DeepSeek Coder family

Key permissions:

  • Commercial use generally allowed
  • Research and development use
  • Modification permitted

Requirements:

  • Check specific license terms for each model version
  • Some versions may have different commercial terms

Best for: Most commercial applications (verify current terms)

Commercial Usage Matrix

Model Family License Small Business Enterprise SaaS Products Redistribution Fine-tuning
Mistral Apache 2.0 Yes Yes Yes Yes Yes
Phi-3 MIT Yes Yes Yes Yes Yes
Qwen2.5 Apache 2.0 Yes Yes Yes Yes Yes
Yi-Coder Apache 2.0 Yes Yes Yes Yes Yes
Granite Apache 2.0 Yes Yes Yes Yes Yes
StarCoder2 BigCode OpenRAIL Yes* Yes* Yes* Limited Yes
Code Llama Custom Yes Limited** Yes Limited Yes
DeepSeek Custom Yes*** Yes*** Yes*** Check terms Yes

*Subject to responsible use restrictions Restrictions for companies >700M MAU *Check specific model license terms

Compliance Best Practices

  1. Read the Full License

    • Don’t rely on summaries
    • Understand all terms and conditions
    • Note any restrictions or requirements

  2. Document Usage

    • Keep records of which models you use
    • Track license versions and dates
    • Maintain compliance documentation

  3. Include Required Notices

    • Add license files to your distributions
    • Include copyright notices where required
    • Attribute model creators appropriately

  4. Regular License Review

    • Check for license updates
    • Review compliance annually
    • Update documentation as needed

Technical Compliance

  1. Model Distribution

    project/
├── models/
│   ├── model_files/
│   ├── LICENSE.txt          # Model license
│   └── ATTRIBUTION.md       # Model credits
├── src/
└── LICENSE                  # Your project license

  2. Code Attribution

    # Example attribution in code
"""
This application uses Mistral 7B model
Licensed under Apache 2.0
Copyright (c) Mistral AI

Model: https://huggingface.co/mistralai/Mistral-7B-v0.1
License: https://www.apache.org/licenses/LICENSE-2.0
"""

  3. API Service Attribution

    {
  "model_info": {
    "name": "Mistral-7B-Instruct",
    "license": "Apache-2.0",
    "source": "https://huggingface.co/mistralai/Mistral-7B-Instruct-v0.2",
    "attribution": "Powered by Mistral AI"
  }
}

Enterprise Considerations

Risk Assessment

Low Risk Models (Apache 2.0/MIT):

  • Mistral family
  • Phi-3 family
  • Qwen2.5-Coder
  • Yi-Coder
  • Granite Code

Medium Risk Models (Custom Open Source):

  • StarCoder2 (responsible use requirements)
  • DeepSeek Coder (verify terms)

Higher Risk Models (Restrictive Custom):

  • Code Llama (size-based restrictions)
  • Have legal team review license terms
  • Assess compliance with company policies
  • Evaluate potential liability exposure
  • Determine attribution requirements
  • Plan for license change scenarios
  • Document approved models for teams

Vendor Management

For enterprise deployments, consider:

  1. Commercial Support: Some vendors offer commercial licenses with support
  2. Indemnification: Protection against IP claims
  3. Service Level Agreements: Guaranteed uptime and performance
  4. Compliance Assistance: Help with licensing requirements

Model Fine-Tuning and Licensing

Derivative Works

When fine-tuning models, consider:

  1. Original License Terms: Fine-tuned models inherit base model licensing
  2. Training Data Licensing: Ensure your training data is appropriately licensed
  3. Distribution Rights: Understand if you can share fine-tuned models
  4. Commercial Use: Check if fine-tuning affects commercial usage rights

Best Practices for Fine-Tuning 

# Example: Documenting fine-tuned model licensing
"""
Fine-tuned Model Information:
Base Model: Mistral-7B-Instruct-v0.2
Base License: Apache 2.0
Fine-tuning Data: [Describe your dataset and its licensing]
Fine-tuning Method: LoRA
Date: 2025-07-20
Restrictions: Inherits Apache 2.0 terms from base model
"""

License Change Scenarios

What to Watch For

  1. Model Updates: New versions may have different licenses
  2. Acquisition Changes: Company acquisitions can affect licensing
  3. Policy Updates: Platforms may change usage policies
  4. Regulatory Changes: Government regulations may affect terms

Mitigation Strategies

  1. Version Pinning: Lock to specific model versions with known licenses
  2. License Monitoring: Set up alerts for license changes
  3. Backup Plans: Identify alternative models with suitable licensing
  4. Regular Audits: Quarterly review of all model licenses in use

Recommended: Apache 2.0 or MIT licensed models

  • Mistral 7B (Apache 2.0)
  • Phi-3 Medium (MIT)
  • Qwen2.5-Coder (Apache 2.0)

For Research and Development

Recommended: Any open model

  • Code Llama (research-friendly)
  • StarCoder2 (community-driven)
  • DeepSeek Coder (strong performance)

For Commercial Products

Recommended: Permissive licenses

  • Mistral family for general use
  • Phi-3 for efficiency-focused applications
  • Qwen2.5-Coder for coding-specific needs

For Enterprise Deployment

Recommended: Well-established licenses with support

  • Granite Code (IBM backing)
  • Mistral Commercial (with support)
  • Phi-3 (Microsoft backing)
  • Large-scale commercial deployment
  • Customer-facing AI applications
  • Regulated industry deployment
  • International distribution
  • Model modification or redistribution
  • Uncertain about license interpretation
  1. Software Freedom Law Center: Open source licensing expertise
  2. Technology Lawyers: Specialists in AI and software licensing
  3. Company Legal Departments: Internal counsel familiar with business needs
  4. Industry Associations: Groups focused on AI governance and ethics

Staying Updated

Monitor These Sources

  1. Model Repository Pages: Hugging Face, GitHub releases
  2. Company Blogs: Announcements from model creators
  3. Legal Tech Publications: Updates on AI law and licensing
  4. Community Forums: Discussions on licensing interpretations

Automation Tools 

# Example: Script to check for license changes
#!/bin/bash
# Monitor model licenses for changes

MODELS=(
  "mistralai/Mistral-7B-Instruct-v0.2"
  "microsoft/Phi-3-medium-4k-instruct"
  "Qwen/Qwen2.5-Coder-7B-Instruct"
)

for model in "${MODELS[@]}"; do
  echo "Checking license for $model"
  curl -s "https://huggingface.co/$model/raw/main/LICENSE" | md5sum
done

This guide provides general information and should not be considered legal advice. Always consult with qualified legal counsel for specific licensing questions and commercial applications.

Last updated: July 20, 2025