OpenAI Severs Ties with Cursor Over Musk's Contract Breaches
OpenAI has terminated its contract with Cursor, a coding startup recently acquired by SpaceX. The decision stems from OpenAI's distrust of Elon Musk's companies, which allegedly violate terms of service. OpenAI will cut Cursor's access to its models on November 12. Despite the decision, OpenAI aims to keep its models accessible to developers. This move is part of ongoing tensions between Musk and OpenAI.
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OpenAI has announced the termination of its contract with Cursor, a coding startup that was recently acquired by SpaceX. The decision, effective November 12, 2026, will see Cursor losing access to OpenAI's models. OpenAI cited a lack of trust in the compliance of Elon Musk's companies as the primary reason for this action. The company emphasized that the decision was made with considerable difficulty.
Cursor, which was acquired by SpaceX for $60 billion, provides models from various companies, including OpenAI, Anthropic, Google, and SpaceXAI. OpenAI's models currently serve about 5% of Cursor's user traffic. Despite this, OpenAI has decided not to offer its future models, such as the upcoming Astra model, to Cursor.
OpenAI's concerns are rooted in past experiences with Musk's companies. Twitter, which merged with SpaceX in February, had previously violated contract terms with OpenAI, leading to a cut in OpenAI's access to Twitter data. This breach was reported by The New York Times. Additionally, Musk admitted under oath that xAI, another of his ventures, had partly used OpenAI's outputs to train its Grok model.
Michael Truell, cofounder and former CEO of Cursor, expressed regret over OpenAI's decision in a statement on X. He mentioned that Cursor is in discussions with OpenAI to find a resolution. The company continues to offer a variety of models through its platform, which includes OpenAI's GPT-5.6 Luna, Sol, and Terra.
This development is the latest chapter in the ongoing conflict between Elon Musk and OpenAI. Musk, a cofounder and early backer of OpenAI, sued the organization in 2024 over its shift to a for-profit model. However, a federal jury found that Musk had missed the statute of limitations for this lawsuit in May.
OpenAI's use of custom contracts with large partners aims to ensure compliance with their terms, a necessity highlighted by the recent acquisition of Cursor. The company had a limited time window to cancel the agreement following SpaceX's acquisition of Cursor, which it has now exercised.
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