Read the license line on an AI quote before you read the price. The price says what leaves the budget this year; the construct says whether it leaves again every year the deployment lives. Executives reach for one word more than any other when they open that conversation — perpetual — because a one-time purchase behaves like equipment and a subscription behaves like rent.
AI Licensing Models
How Is AI Software Licensed —
Per Seat, Per Device, Perpetual or Subscription?
The four license constructs on an AI quote, what each does to next year’s budget, and the three details to settle before the order goes in.
Built from real buyer questions in our sales meetings
Direct Answer
Whether the cost recurs is the difference that matters. A perpetual per-device license turns AI into a capital line that survives the budget cycle; per-seat subscription pricing scales with headcount, which is precisely why buyers say they can never license everybody. Iternal sells the AirgapAI client as a one-time perpetual license tied to the device, updates included and no annual maintenance charge; Blockify is licensed per user for anyone who touches the data, perpetually with maintenance or as a subscription.
The limit: transfer is the detail that is not settled. No business-side rule has been decided yet for what happens to the license when a device is replaced, and because the application verifies its key offline and never reports back, a transfer leaves no trace on the product side; you keep that record. A perpetual license can survive the budget cycle and still be one you cannot prove you own after a hardware refresh. Write the transfer rule into the order.
Three details decide what a license really costs: whether an entitlement moves when a machine or an employee is replaced, whether year-one maintenance is included or billed, and how activation behaves on a device with no route out. Press the first hardest — it has no default answer, and it returns with every hardware cycle.
License construct and license price are separate questions. The construct is the shape of the entitlement: what one license covers and what triggers the next purchase. For more information on the dollar figures visit the cost breakdown; for terms and payment schedules visit procurement and contract terms.
Perpetual Is the Word Buyers Bring to the Table
Of every commercial term buyers use unprompted, perpetual license surfaces most. It names the outcome executives want: buy once, own it, stop negotiating. Amortizing one fee across the working life of the machine makes the arithmetic land with finance — a single capital event instead of a line that reappears every month.
For the local client, Iternal treats perpetual as architecture before commerce. Customers running AirgapAI on sealed networks cannot reach an outside service to verify a subscription, so a recurring entitlement check would be a dependency their environment cannot satisfy. AirgapAI is licensed with a key the application verifies offline against a public key baked into the software, so it never calls home and never checks a license over the network.
Buyers split on whether that is generous. Some call corporate perpetual structures outrageous, because one large number is harder to move through a budget committee than twelve small ones. Others ask for a three-month subscription to prove the software works first. Iternal supports both shapes.
Four License Constructs, Three Questions Each
Four constructs cover almost every AI quote a business leader sees, and marketing language rarely separates them. Three questions do, because each exposes a cost that lands after the purchase order: what happens when hardware or people change, what updates cost after year one, and what the software demands from the network.
| License construct | When hardware or people change | Maintenance and updates | Activation with no internet |
|---|---|---|---|
| Perpetual, per device How Iternal sells the AirgapAI client |
Tied to the machine. A device damaged mid-life is replaced and the software reinstalled at no second charge; a planned refresh onto new hardware is a new purchase. | None charged. Published updates included for the life of the device. | Verified offline against a public key baked into the software. No activation server, no network check, no phone home. |
| Per seat, per named user How Iternal licenses Blockify |
Follows the person. A seat switches from leaver to joiner administratively. | Annual maintenance for continued updates, or folded into a subscription. | Recorded when the order is placed rather than enforced by the running software. |
| Subscription Monthly, annual or multi-year term |
Reassignment is routine: the entitlement belongs to the account, not the hardware. | Included. The fee is the maintenance. | Assumes a route out to verify the subscription — why sealed sites rule it out. |
| Consumption or credits Metered access, pay as you grow |
Nothing to move. The balance sits with the account, and unused credits roll over. | Carried inside the rate. | Metering needs somewhere to report. AirgapAI has no token fee, because inference runs on the device. |
The second column is the one to press. Maintenance and activation confirm in a paragraph. Transfer is a policy question that recurs every few years, and it is where a cheap license quietly becomes an expensive one.
Why Per-Seat Pricing Stops at the Edge of the Org Chart
Buyers push back on per-seat pricing with arithmetic rather than opinion. The figure they quote for a cloud AI assistant runs from $30 to $60 per user per month; multiply the low end by a workforce and the all-employee rollout dies in the spreadsheet. One buyer called monthly per-seat pricing cost-prohibitive very fast at scale.
Rationing is what happens next, and rationing is what stalls adoption. Organizations cap seats to stay inside the budget, then decide which employees are warranted the advanced features, and the rest of the workforce watches an AI program happen to other people. People moved onto lower plans come straight back asking for more.
A per-device perpetual license moves the multiplier: headcount times months times years becomes devices times once, and the device is a machine the organization was buying anyway. Test that argument against your own numbers.
The Refresh Cycle Is the Renewal Nobody Negotiated
A perpetual per-device license has no expiry date and still has a term: the working life of the machine. Buyers put that life at roughly four years, give or take, and the hedging is real — some fleets turn over in three, some in five, a hardened defense fleet in a decade. That cycle schedules your next license purchase. The anniversary you never signed is a hardware procurement calendar.
Damage and planned refresh are two different events. A machine that fails part-way through its life gets replaced, the software gets reinstalled, and the customer is not charged again. A scheduled refresh onto new hardware is treated as a fresh purchase, because the entitlement was written against the life of the device it was sold for. Between the two sits a judgment call: a transfer has to stay reasonable, and repeated hops onto successive new machines fall outside it.
The open point deserves naming plainly. No business-side rule has been decided yet for what happens to the license when a device is replaced, and whatever that rule becomes can be implemented on the technical side. Because the application verifies its key offline and never reports back, nothing on the product side records a move, so the register of which entitlement sits on which machine is yours to keep. Four questions settle it in the order rather than in year three:
Pin it down: questions for your evaluation
-
On a scheduled device replacement, does our entitlement move to the new machine?The one detail with no default answer, turned into something you can hold.
-
If a machine fails or is damaged mid-life, are we charged again for the replacement?Whether a dead laptop is a reinstall or a repurchase.
-
What record proves our entitlement, and in what format should we keep it?Tracking sits with you, so the register exists before anyone asks to see it.
-
On a machine with no route out, what must happen before the software answers?Whether activation is a runtime dependency or an order-time formality.
FAQ
FAQ: How AI Software Is Licensed
As a one-time perpetual license tied to the device, with published updates included for the life of that device and no annual maintenance charge. Iternal will structure a subscription where a customer asks for one, and buyers often want one briefly before committing to ownership. Blockify is licensed per user instead, perpetually with annual maintenance or as a subscription.
A machine damaged mid-life is replaced and the software reinstalled at no second charge. A planned refresh onto new hardware is treated as a fresh purchase, and any transfer has to stay reasonable. No business-side rule has been decided yet for device replacement, so put the rule you want into the order. The record is yours to keep, because the application verifies its key offline and never reports back. A per-user seat such as Blockify switches from leaver to joiner administratively.
Nothing has to reach anything. AirgapAI is licensed with a key the application verifies offline against a public key baked into the software, so a sealed machine needs no licensing server, no activation call and no route out to the internet. Entitlement is recorded when the order is placed and the key issued, and verification happens locally on the device from then on.
Where they log in separately, yes. AirgapAI ties to each operating-system user account, and every account carries its own file system, assigned data sets and chat history; there is no shared multi-user instance. Only people signed in under the same account share one interface and history. Shift-based operations should model entitlements against logins rather than machines.
AirgapAI carries no token fee and no metering, because inference runs on the device and there is nothing to count. Iternal meters credits on its cloud-delivered tooling, where credits load into the account and unused balance rolls over. Growing in steps works: license one team, prove the value, scale from there.
Because the cost scales with headcount and never stops. Buyers quote $30 to $60 per user per month for a cloud AI assistant; repeated monthly across a workforce, the all-employee deployment fails the budget test before the security review starts. A per-device perpetual license changes the multiplier to devices times once.
Settle the Transfer Rule Before the Order Goes In
Pick the construct that matches how your organization funds software, then get the transfer rule, the maintenance line and the activation behavior written into the order. Those three answers turn a license line into something finance can plan around for the life of the fleet.