Ask HN: Huge enterprise customer wants to see our source code

We are a small 5-person enterprise software startup, operating in the data analytics/ML space. We are working on starting a proof-of-concept with a huge potential customer ($50+bn in revenue). We recently identified our first use case, and are ready to get into contract negotiations.

But then they got back to us with an odd request: they want to see our source code (likely upon completion of the PoC). Given that our core IP is our models and algorithms, we are reluctant to agree. Their justification is: "we want to see how your algorithms made their decisions."

We know that they have lots of resources and are building up internal data science team. And yet it was pointed out to me that their goal might not necessarily be to outright steal our IP, but rather to cover their bases. But we are still worried they might be "inspired" by the parts they see and get their internal teams to replicate across other sites or use cases. And we don't have the resources to litigate, nor any way of knowing they do this.

My questions: 1) Has anybody run into a request like this? How would you respond? 2) How likely do you think their goal is to genuinely "see what happens under the hood" as opposed to replicate in the future? 3) Are there any legal protections we can put in place to prevent them from not just copy-pasting our code, but also from "learning from it" or so?

This is a complete no-no. There really is no justification for this whatsoever.

What does "cover their bases" mean?

As them to explain what they are trying to achieve and find other ways to assuage their concerns.

The only legitimate thing is to have something in case you fail and they have "banked" on you. There is a legit way to solve that. basically if they want that tell them they should pay for an Escrow service - that will hold your code and they would receive it if you ever cease to exist. But it's important that they would need to pay those fees (they are significant.)

That should make them back down.

It's entirely unreasonable for them to demand access to source code.

And a possible 1a: Tell them you'll be happy to give them your source code, and everything else to boot, if they'll buy your company.

This way you get to jump straight to your exit, and can maybe also structure the deal so that you and your employees get jobs at the BigCo (if you want them). Feel free to set the selling price as high as you like -- they would want the deal more than you would, so you have a lot of leverage in the negotiation.

And if they balk? Hey, they asked for terms to see the source code, you gave them terms! It's not your fault if they don't like them :-D

If they are trying not to end up in the situation where you go out of business and they are screwed, offer them to escrow the code for a certain amount of money. If you go out of business, they get the code. If you do not, they don't

maybe what they want is just white box explanation on your models?