Claude Code MIT license - can I actually build commercial products with it?

Hey everyone, been playing around with Claude Code (Anthropic's CLI tool for coding with Claude) and I'm pretty impressed. Thinking about building a developer tool startup around it - basically extending it with some specialized workflows for my niche.

I see it's released under MIT license on Github but I'm getting confused by a few things:

• Can I actually sell a product that uses this code commercially?
• Do I need to open source my modifications?
• What about the API costs - are those seperate from the license?
• Any "gotchas" I should know about?

My co-founder is worried we might get sued or something if we build on top of their code. Am I overthinking this or is there actually something to worry about?

IP attorney here. Your co-founder is being overly cautious (though I appreciate the diligence). MIT is one of the most permissive open source licenses out there. Here's what you need to know:

What MIT allows:

• Commercial use - yes, you can absolutely sell products built on MIT-licensed code
• Modification - you can change the code however you want
• Distribution - you can distribute your modified version
• Private use - you can use it internally without telling anyone

What MIT requires:

• Include the original copyright notice and license text in any copies of the software you distribute
• That's basically it

What MIT does NOT require:

• Open sourcing your modifications (this isn't GPL)
• Attribution in your marketing or UI
• Paying royalties
• Getting permission from Anthropic

The API usage is a completely separate concern - you'll need to comply with Anthropic's API Terms of Service for that, which has its own rules about usage, rate limits, etc.

Been building on open source for 15 years. MIT is basically "do whatever you want, just don't sue us and keep the license file in there somewhere." Its the most business-friendly license there is.

Companies like Microsoft, Google, and Apple all use MIT-licensed code in their commercial products. React is MIT. Node.js is MIT. Tons of stuff you use everyday is built on MIT code.

One thing tho - make sure you understand the difference between:

1. The Claude Code tool itself (MIT licensed, use freely)
2. The Claude API (commercial service, pay per token, has its own ToS)
3. The Claude model weights (NOT open source, you can't self-host Claude)

Your product will still need to pay Anthropic for API usage. The open source part is just the CLI interface code, not the underlying AI.

This is super helpful, thanks! So just to make sure I understand:

I can fork Claude Code, add my own features on top (specialized prompts, custom UI, integrations with other tools), and sell it as a commercial product. I just need to keep the MIT license file in my codebase and pay for API usage separately.

Is that right? Seems almost too good to be true lol

Thats exactly right. We did this with our product (AI code review tool built on Claude Code). Our lawyers signed off on it, our investors had no concerns with the IP.

Few practical tips from our experience:

• Keep a THIRD_PARTY_LICENSES file that lists all the open source components you use including Claude Code
• Make sure your modifications don't accidentally expose customer data through the API (read the API data privacy terms)
• Budget for API costs carefully - they can add up fast with heavy usage
• Consider what happens if Anthropic changes their API ToS - build in some flexibility

The MIT license itself is rock solid. The business risk is more about API dependency than license issues.

@FreelanceDev_Mike Yes, you've got it. MIT really is that permissive - that's why it's so popular for developer tools and libraries. Companies WANT their open source code to be widely adopted, even commercially.

One additional consideration since you mentioned a co-founder: make sure your own company's IP assignment agreements are in order. You want to ensure any code your team writes (including modifications to Claude Code) is properly assigned to the company. Use a solid IP assignment template for all contributors.

And @VCBackedFounder makes a great point about API dependency. From a legal/business standpoint, I always recommend clients:

1. Review the API ToS thoroughly for any restrictions on your use case
2. Understand the termination provisions - what happens if they cut off your API access?
3. Consider whether you need enterprise API terms for better SLAs and legal protections

Good luck with your startup!