ORD-2.2
A cloud or hosting provider training a model on it, under ORD 2.2
Offers managed services to third parties as its primary business. Any machine learning training, fine-tuning, or distillation using the Work. This resolves to the Canopy tier with a Compute licence required on top.
Tier
Owed
A quarterly Canopy Report. Section 5.1 imposes a royalty only when the Canopy Licensee makes Production Use. Plus a separate Compute Fee before the training run.
Sections in play
1.8, 3.1, 5.1, 5.2, 6.1, 6.2, 6.3, 6.5
Who and what
The situation being resolved.
Actor
A cloud or hosting provider
Offers managed services to third parties as its primary business.
over 2M USD
Situation
Training a model on it
Any machine learning training, fine-tuning, or distillation using the Work.
Rulings
4 questions resolved against the text.
Which tier applies?
Canopy. Offers managed services to third parties as its primary business. Section 5.2 reporting applies; the Section 5.1 royalty attaches when the Licensee makes Production Use and only to attributable revenue.
Sections 1.8, 3.1, 5.1
Is anything owed?
A quarterly Canopy Report. Section 5.1 imposes a royalty only when the Canopy Licensee makes Production Use. Plus a separate Compute Fee before the training run.
Sections 5.1, 5.2
Does training need its own licence?
Yes, at every tier including Root. Section 6.1 removes AI Training Use from the base grant entirely. The fee is charged per million records included in the training corpus. Training without it is not a lesser breach of these terms, it sits outside the licence, which Section 6.5 treats as infringement.
Sections 6.1, 6.2, 6.5
What must the resulting model do?
Carry provenance disclosure on output that reproduces the Work substantially word for word, above the threshold set in Exhibit B. Section 6.3 targets the attribution harm alleged against Copilot rather than attempting to police memorisation.
Sections 6.3
Cautions
What this situation gets wrong most often.
Corpus Inclusion under Section 1.11 reaches datasets compiled with actual knowledge they will be used for training. Passing the Work to a third party who trains on it does not move the obligation off you.
Section 8.3 of ORD requires a withdrawal of consent to propagate to any derivative you have distributed. Whether that is operationally achievable at depth is a published open question.
Same actor
Other situations for this party.
Non-normative. Where this and the licence text disagree, the licence text applies.