OpenAI plans to end AI deal with SpaceX-bound Cursor

OpenAI announced on Friday that it will cease providing AI models to Cursor, a coding-tool company recently acquired by SpaceX, as part of an intensifying dispute between OpenAI CEO Sam Altman and SpaceX's owner Elon Musk. The feud between Altman and Musk has been ongoing for years, reaching a peak earlier this year when Musk filed a $150 billion lawsuit against OpenAI.

During the trial, Musk's lawyer alleged that Altman was a deceitful individual, while OpenAI contended that Musk had sought control of the company. OpenAI explained in a blog post that they were terminating the partnership due to concerns about SpaceX potentially violating their terms of service by using their technology in a manner that contradicts their expectations.

Musk, in response, made a statement on X (formerly Twitter), expressing his indifference to the decision. He accused Altman and OpenAI President Greg Brockman of being untrustworthy, reinforcing his claim that they had "stolen an open-source nonprofit". Earlier this year, a federal jury ruled against Musk, deeming his lawsuit filed too late.

However, Michael Truell, a co-founder of Cursor and now an executive at SpaceX, indicated on X that the company was in discussions with OpenAI to resolve the matter. Following OpenAI's announcement, Anthropic, a rival to both companies but with an ongoing partnership with SpaceX, stated its intention to augment compute resources to support Claude models in Cursor, as per Tom Brown, one of Cursor's co-founders.

OpenAI highlighted in its blog post that X had breached the terms of its contract with OpenAI following Musk's acquisition of the platform. The AI company mentioned that they typically rely on customized contracts to ensure compliance with their terms of service and safety at scale when working with large partners like SpaceX. OpenAI proposed a shutoff date of November 12, 2026, noting that their agreement with Cursor grants them a limited timeframe to terminate the contract following a change of control.

SpaceX acquired Anysphere, the startup behind Cursor, in a $60 billion all-stock deal in June, and finalized the acquisition earlier this month.