# OpenAI Prepping for On-Prem Product? > Source: > Published: 2026-06-11 22:28:01+00:00 # Worth Knowing ##### OpenAI Lays Groundwork for On-Prem Product [— Service Terms](https://openai.com/policies/service-terms/) OpenAI's Service Terms gained a section governing software it delivers for installation on a customer's own systems. T**he new "Licensed Materials" terms cover code, containers, and modules run on local machines or private cloud, and require permanent deletion of every copy on termination.** Contract language for on-prem delivery tends to ship before the product it is written for. **In human terms:** A business evaluating a locally deployed model for security-sensitive work reads the new section and finds the exit cost spelled out: when the contract ends, every copy of the installed software has to be deleted. That is a planning item, not a footnote, for anyone building a pipeline around on-prem inference. **Why this matters:** This is the kind of clause that signals a product direction before any announcement, which is exactly why it is worth catching here. For studios weighing local deployment, the deletion-on-termination obligation is the term to plan around. Below for more… **The mechanics** • New defined term. "Licensed Materials": software, packages, code, containers, or other modules delivered "on local machines, private cloud infrastructure, or other customer-managed systems." • The license is limited, non-exclusive, non-transferable, and non-sublicensable, with no modification or redistribution. • On termination, the customer "must permanently delete the Licensed Materials and all copies thereof."