OpenAI has ended its lucrative partnership with Cursor, an AI coding platform, following the latter's acquisition by Elon Musk's SpaceX. The agreement, which was estimated to bring in more than $1 billion annually for OpenAI, is set to conclude on November 12, 2026. OpenAI stated that the decision stems from a lack of confidence in SpaceX's adherence to its terms of service, referencing past contract disputes with Musk's other ventures, including X (formerly Twitter) and xAI.
The termination of the partnership marks a significant escalation in the ongoing dispute between OpenAI CEO Sam Altman and Elon Musk. Musk, a co-founder of OpenAI, sued the company in February 2024, alleging that Altman and other executives had abandoned the organization's original nonprofit mission in favor of commercial interests. While a federal jury ruled against Musk in May 2026, finding his claims were barred by the statute of limitations, the underlying animosity persists. OpenAI's move to cut ties with Cursor, despite the substantial revenue involved, underscores this deep-seated conflict.
Cursor, developed by Anysphere, had become a prominent AI-powered coding tool and was one of OpenAI's top customers at the beginning of 2026. The partnership allowed Cursor to integrate OpenAI's models into its platform, providing developers with advanced AI assistance for coding tasks. By the spring of 2026, OpenAI had projected that Cursor would generate over $1 billion in annualized revenue. SpaceX completed its acquisition of Anysphere for $60 billion in an all-stock transaction in August 2026, after an initial partnership agreement in April. This acquisition triggered a change-of-control clause in Cursor's contract with OpenAI, providing grounds for termination.
OpenAI's public statement indicated that the company could no longer be assured that SpaceX would use its technology within the agreed terms. This decision reflects a broader pattern of distrust OpenAI has expressed towards Musk's business dealings. Musk, in response to the news, dismissed the decision on social media platform X, calling Altman and OpenAI President Greg Brockman "untrustworthy" and reiterating his claims that they had "stole[n] an open source nonprofit".
The termination will require Cursor to find alternative AI model providers. Anthropic has already announced its intention to increase compute support for its Claude models within Cursor, potentially filling the void left by OpenAI. Cursor CEO Michael Truell noted that OpenAI's models constituted approximately 5% of the platform's user traffic, suggesting that the impact of the separation may be manageable for the company. The broader implications of this split highlight how geopolitical and personal rivalries are increasingly influencing business relationships in the artificial intelligence sector.