Zed's Terms of Service: What You Need to Know Before Using the AI-Powered Editor

Zed Industries, Inc. has published its Terms of Service for the Zed code editor and associated AI-powered features, establishing the legal framework for how users can access and utilize their software. The terms, last updated March 2, 2026, create a binding agreement between users and Zed that governs everything from basic usage rights to complex liability limitations.

Key Usage Requirements

The service is only available to users aged 18 and older, with explicit restrictions on previous suspensions or removals. Users must comply with all applicable laws and regulations when accessing the platform. For business entities, the terms require that the person accepting them has proper authority to bind the organization.

Zed's AI features rely on multiple third-party providers including Anthropic, Google, OpenAI, and LiveKit. Users must adhere to each provider's acceptable use policies, which are incorporated by reference into Zed's terms. These policies cover everything from content restrictions to prohibited use cases for AI-generated outputs.

Data Handling and Privacy

When users input materials into the service, Zed gains a non-exclusive license to process that data for specific purposes: performing service obligations, generating telemetry for improvement, and complying with legal requirements. The terms explicitly state that autocomplete features may send user data to AI providers in the background, though this can be disabled.

Importantly, Zed claims ownership of any AI-generated output but grants users full rights to that content. The company also collects telemetry data to improve services, though this is de-identified and aggregated when shared with third parties.

Payment and Subscription Terms

Several features require payment, with fees denominated in U.S. dollars and generally non-refundable. The service offers subscription plans with automatic renewal, charging users on their billing date and subsequent renewal dates. Users must cancel before renewal to avoid additional charges.

For usage beyond included limits, Zed charges additional fees per prompt or data submission. The terms also address delinquent accounts, noting that Zed may suspend access for unpaid amounts and potentially delete accounts if payment methods become invalid.

Legal Protections and Limitations

Zed provides the service "as is" without warranties, explicitly disclaiming merchantability, fitness for particular purposes, and non-infringement. The company limits its liability for indirect damages and caps total liability at either 12 months of payments or $100, whichever is greater.

A mandatory arbitration clause requires most disputes to be resolved through binding arbitration rather than court proceedings. Users can opt out within 30 days of agreeing to the terms by contacting Zed directly. The arbitration agreement also includes a class action waiver, preventing users from participating in collective legal actions.

Termination and Modification Rights

Zed reserves the right to modify or discontinue the service at any time without notice. Users can terminate their accounts at any time, but certain provisions survive termination including payment obligations and liability limitations. The company may immediately suspend access for various violations including breach of terms, non-payment, or security risks.

Third-Party Integrations and Collaboration

The service supports collaboration features that allow data sharing between accounts, including with non-affiliated parties. Users must acknowledge that Zed exercises no control over how shared data is used by third parties. Integration with external platforms is also supported, though Zed disclaims liability for third-party services.

Compliance and Export Controls

Users must comply with all relevant U.S. and foreign export laws. The terms prohibit use by individuals or entities on government restricted lists or from embargoed countries. Users also cannot submit information controlled under U.S. International Traffic in Arms Regulations.

These comprehensive terms reflect the complex legal landscape surrounding AI-powered software services, balancing user rights with the company's need to protect its intellectual property and limit liability in an emerging technology space.

For the full terms and to review any updates, visit Zed's Terms of Service page.