OpenAI Cut Off a Billion-Dollar Customer to Avoid Elon Musk

OpenAI has severed ties with one of its largest customers, Cursor, to prevent the company from partnering with Elon Musk. Cursor, which has been paying OpenAI fees to utilize its AI models, was once among OpenAI’s top five revenue-generating customers. In 2026, Cursor was projected to bring in over $1 billion in annualized revenue for OpenAI.

OpenAI’s decision stems from concerns that SpaceX, Musk’s company, might violate its terms of service by using OpenAI’s technology. The company emphasized that Musk’s track record of breaching contracts makes them uneasy about partnering with him. OpenAI’s blog post revealed that the company generates over $40 billion in annualized revenue through multiple streams, including subscriptions, ads, and Codex, an AI coding tool.

While losing a major customer like Cursor might not directly impact OpenAI’s finances, it was still a challenging decision that could harm its reputation among developers. Cursor’s founder and CEO, Michael Truell, clarified that OpenAI’s models only account for about 5% of Cursor’s user traffic. However, OpenAI’s head of core products, Thibault Sottiaux, disputed this claim, stating that token usage is not a reliable measure of revenue value.

The partnership between OpenAI and Cursor has been a complex one, with OpenAI initially investing in Cursor before the two companies went their separate ways. Despite this, they have maintained a relatively cordial relationship. OpenAI’s decision to cut off Cursor may have been influenced by Musk’s claims that his AI startup, xAI, used OpenAI’s models for training.

The blog post also mentioned that Anthropic, another AI company dependent on Musk’s SpaceX for data center capacity, would continue to offer its models in Cursor despite the partnership.