OpenAI to cut off Cursor after SpaceX acquisition–Here’s why

OpenAI has announced plans to cut ties with Cursor after its acquisition by Elon Musk’s SpaceX, marking an escalation of the bitter rivalry between Sam Altman and Musk.

The announcement on Friday highlights the plans to stop providing AI models to the coding-tool company.

Taking to X, OpenAI announced, “We’re ending our partnership with Cursor following its acquisition by SpaceX. Under our proposal, Cursor’s direct access to our models would end on November 12.” The company will also withhold access to future models, including Astra.

According to the US-based tech company, the decision to end the deal with Cursor was made because of lack of confidence that SpaceX will use OpenAI technology within our terms of service based on our experience with Elon Musk’s companies violating the contracts.

This points to past contract breaches by Elon Musk-owned platforms like X (formerly Twitter) and admissions under oath that xAI had violated OpenAI's terms.

Cursor’s agreement allows OpenAI a limited period to terminate the contract following a change in control. The firm noted that accelerating AI capabilities and the planned release of "Astra" heightened its responsibility to ensure models are used in line with its policies.

Michael Truell, Cursor co-founder and now a SpaceX executive, expressed disappointment, emphasizing that OpenAI models account for roughly 5 percent of Cursor traffic.

He noted that they are actively speaking with OpenAI to resolve the issue, defending Cursor's history as a long-standing, trusted OpenAI partner.

"Cursor was one of the very first users of OpenAI, ​we’ve worked closely with their team for years, and we’ve trusted their platform to be a neutral infrastructure for our business," Truell said in an X post on Friday.

The decision also unfolds against a backdrop of deep, long-standing hostility between OpenAI CEO Sam Altman and Elon Musk. The CEO of Tesla also filed a $150 billion lawsuit against Altman alleging OpenAI betrayed its nonprofit mission. Later it was dismissed by a federal jury.