Reading a model license takes five minutes. Not five hours. Here is how I spend them.

The first minute goes to the grant. Does it explicitly allow commercial use, modification, and distribution? If any of those is missing or hedged, I slow down. A license that does not clearly grant commercial use is a license I do not build on.

Minutes two and three go to the gotchas. Thresholds and triggers: user-count limits, revenue caps, the Llama-style MAU clause. Rare, but brutal when they apply. Then the restrictions section: acceptable use policies, no-compete training clauses, redistribution conditions. This is where custom licenses earn their reputation for surprise.

Minute four is the boring stuff that still matters. Attribution and notice requirements. Most licenses ask for something small, like keeping a copyright notice. Easy to comply with. Easy to forget. I have watched teams forget it, and it is an awkward fix after the fact.

Minute five is verification: does this license match my version and my use? Licenses attach to specific releases, and "using the weights" versus "using the API" can mean different terms. Write down what you found. Future you will be grateful. Doing this once by hand is also the fastest way to learn what an AI model license checker is actually checking on your behalf. It is the checklist I wish every open source LLM license guide printed on page one.

Then keep a log. Model name, version, license, date checked, link to the license file. One spreadsheet row per model. When an investor, acquirer, or enterprise customer asks, you hand them the sheet. That is what "we have our licensing in order" looks like in practice. A license compliance audit SaaS productizes this log. Worth it if licenses are core to your product. Overkill if you ship on two models.

One last habit: custom licenses get updated more often than standard ones. Set a quarterly reminder to re-check terms if the model is core to your product. A license you verified in January is a rumor by December. If you would rather skip the homework, I keep an LLM license comparison of 200 models at localaitools.fyi, and I write commercial use AI model clearance reports that run this checklist for you.