Indian companies are taking baby steps towards building world-class AI products and companies, but it turns out there could be many stumbles along the way.
Cred has been trolled by internet users after announcing an AI hackathon, the fine print of which gave all rights of the resulting submissions to Cred itself. Cred CEO Kunal Shah had today announced Cred Rabbit Hole, which was billed as an AI hackathon for India’s visionary engineers. “AI won’t replace you. Someone from this hackathon might…Winner gets ₹50 lakh and a place in history,” Shah posted on X.
While the post generated quite a bit of buzz — a Rs. 50 lakh prize in a hackathon is quite generous, even by global standards — some users soon spotted something odd in the hackathon’s terms and conditions. The fine print of the hackathon stated that all IP rights from the event would rest with Cred and not the participants. “All intellectual property rights, including but not limited to copyrights, patents, trademarks, trade secrets, and any other proprietary rights in and to all code, designs, concepts, algorithms, and other materials developed during the hackathon (“submissions”) shall be deemed to be work for hire and CRED shall have all intellectual property rights in the submissions. The service provider waives its moral rights to be identified as the author of the submissions,” the terms and conditions said.
“By participating in the hackathon, participants hereby irrevocably assign and transfer to CRED all right, title, and interest in and to their submissions, including all intellectual property rights therein. Participants agree to execute any documents necessary to perfect the assignment of intellectual property rights to CRED,” the conditions added.
This didn’t meet with the approval of X’s developer community. “This is not good. It’s very restrictive. Most hackathons allow participants to retain ownership with a license granted to organisers,” posted X user Bengaluru Man.
“Even if it is legal, taking away all IP rights of the projects from their actual builders is just straight-up unethical! At that point, you’re pretty buying out every good idea that comes in for pennies and throwing some money at one of them,” wrote Aditya Oberai.
“Kunal, the IP rights aren’t in builder spirit. CRED can do better,” wrote X account Pink Bengaluru.
Some called the hackathon a scheme to generate good ideas for cheap for Cred. “Organizing a hackathon while stripping the actual builders of their IP rights. Essentially, it’s a way to acquire good ideas for pennies, which is downright unethical!” wrote X user Aaryansh.
An IP lawyer chimed in as well. “WTF.. As an IP Lawyer I suggest participants to stay away from this. This is not a Hackathon, This is they shrewdly asking you give your idea, build it for them & giving you nothing in return, & keeping all the rights to themselves. RUN,” wrote X user Digvijay Singh Ponia.
“Just read the T&C for this hackathon and you’ll realise that participating in it is like selling your soul to the devil,” wrote another user.
But this wasn’t the only condition that met with the displeasure of X. Users also saw that they required to sign in using a Cred account. “Nah, not the folks who are going to apply to this. “Login with CRED” to apply? Cringe,” wrote a user.
“So they’re enforcing “login with Cred” (which has nothing to do with the hackathon) to sign up and mandatorily taking away all your rights to what you build. This is a masterclass in how NOT to organize a hackathon!” wrote another.
But to make matters worse, it turned out that if you signed in using Cred, the company automatically checked your credit score, and then sent you an email. “wtf i even got a credit check??? for trying to apply for a hackathon, this is a first.” wrote user Sudham. He shared an email which displayed his credit score, saying it had been “generated through CRED based on your consent”.
At this point, a lot of hate began being directed at Cred founder Kunal Shah. “AI won’t replace you but some Indian founder will definitely exploit you,” wrote a user.
“My number 1 suggestion to anyone starting their career in tech: If possible, don’t work for Indian founders, unless you have a close friend vouching for the company don’t do it, most of the Indian founders have yet to catch up with US & EU in terms of ethical standard operating procedures of business,” wrote user amul.exe.
Things got so bad that someone even implied they were deleting Cred over the hackathon fiasco.
To his credit, as the comments started coming in, Cred CEO Kunal Shah changed the hackathon’s IP policy. “Fair call outs on IP. Shouldn’t have been there to start with. Dropping it,” he posted. The new terms and conditions read: “Participants shall own all rights in their respective submissions”. Cred acted quickly to fix the problem, but the fact that these onerous conditions existed in the first place shows that Indian companies instinctively still usually look for immediate benefits instead of cultivating relationships, fostering innovation and building ecosystems in the way that Silicon Valley and many European markets seem to have mastered.