A license lets a buyer use copies of your code and history for a stated purpose while you keep ownership. A sale transfers the copyright itself. Operating companies almost always license; a wound-down company may sell, but only the party that holds the IP can sign.
When an AI company offers to pay for your repositories, the paperwork will take one of two shapes. Either you grant a license and keep the code, or you sell the IP and hand it over. The difference decides what you can still do with your own work the day after you sign.
What does a license actually grant?
A data license is permission. You let the buyer copy your repositories, commit history, review threads and issues, and use them for a purpose the agreement names, usually training and evaluating models. You still own the copyright. You can keep shipping the product, license the same history to someone else (unless you agreed not to), and sell the company later with the code intact.
The terms that matter in a license are scope, field of use, exclusivity, term and what happens to the data when the term ends. Read those clauses first.
What does selling the IP mean?
A sale is an assignment of the copyright. The buyer becomes the owner and you keep nothing unless the agreement licenses rights back to you. For an operating company that is rarely sensible: you would be selling the thing your product runs on.
For a company that has stopped operating, an outright sale can be cleaner. There is no product left to protect, the founders want a clean close, and an assignment ends the company’s ongoing obligations around the asset.
Side by side
| Question | License | Sale of the IP |
|---|---|---|
| Who owns the code afterward? | You | The buyer |
| Can you keep using it? | Yes | Only with a license back |
| Can you license it again? | Yes, unless exclusive | No |
| Typical seller | Operating company | Wound-down company, or its assignee |
| Who must sign? | The company | Whoever holds the IP now |
| Ongoing obligations | Delivery, updates, audit rights | Usually ends at closing |
What do buyers’ own pages say?
Posted terms tilt toward licensing. On micro1’s /data page, title to the underlying data stays with the company. Prism’s licenses start out exclusive and get tailored to how broad and how sensitive the data is, while the seller holds on to full control of data and rights. SimpleClosure, working with closing companies, counts code and workspace exports among the assets founders can turn into cash, but posts nothing on deal structure.
Founders skim the exclusivity clause and regret it later. Granting exclusivity can lock out a second buyer for as long as the term lasts. When a buyer wants it, ask what it is paying for that privilege.
Which suits an operating company?
A non-exclusive license, scoped to training, with a defined set of repositories and dates. You keep the code, the product, the option to sell the company and the option to license again. Check three things before you sign:
- Field of use. “Training and evaluating models” is narrower than “any purpose”.
- Personal data. Commit authors, reviewers and issue reporters are people. Agree who de-identifies, and remove what you can first.
- Confidential client material. Anything you owe a client confidentiality over stays out.
Which suits a wound-down company?
It depends on who holds the IP. If the company still exists and owns the code, it can license or sell. If a lender holds a security interest, the lender may have to consent. If the assets went to an assignee for the benefit of creditors, the assignee signs, not the founders. If an acquirer bought part of the business, check whether the code went with it.
Selling outright suits a company that will be dissolved and has no use for the code. Licensing suits founders who might restart, or who want to keep the option of a second buyer. Either way, workspace data (chat exports, docs, design files) is usually handled alongside the code, and it carries more personal data, so it needs more scrubbing.
Questions to ask before you sign
- Is this a license or an assignment? Find the granting clause.
- Exclusive or not, and for what term?
- What is the field of use?
- Who removes personal data, where, and before or after transfer?
- What happens to copies when the term ends?
- Who on our side has authority to sign?
For the wider map, the homepage on how to sell code to AI sets out who buys and what each refuses, and the page on selling a shut-down startup’s code handles the wind-down case. General information only: counsel reads the contract, not a blog post.
Get the granting clause right and most of the rest becomes negotiation over price, which is the easy part.