00:00 Speaker A

Bring us up to speed here, Pras. What exactly did Sam Altman do here? W- Why is he, why is he cutting off Cursor?

00:10 Pras

So, over the weekend or I’m think I think on Friday night, uh, Open I said that they were going to wind down their contract providing Open AI models to Cursor, uh, with with a shutoff date of March 12th of of this year. So, they’re making the the decision because they can’t be confident that SpaceX will use the technology within its terms of service.

00:39 Pras

Uh, they also added that uh a little think this is this is the whole Musk versus Alman thing, right? So they

00:46 Pras

said when after Musk acquired Twitter, now part of SpaceX, the company broke the terms of the service contract and under oath this year, must said that XAI also did that, right? So, so they’re they’re sort of bringing the receipts there as to why they are cutting off access to, um, to Musk’s company like SpaceX. But the the the bigger context here of course Josh is the fact that, you know, the big lawsuit they were embroiled in,

01:10 Pras

uh, Musk suing Open AI saying that he that they sort of, uh, committed some sort of fraud by converting part of the company to a for-profit business and that went to trial and and Musk lost. And so there’s still a lot of bad blood there, but I think there’s a little bit of, uh, uh, a mix of both the bad blood but also some true concern.

01:21 Speaker A

Well what’s the potential business impact of this, Pras? Like if Cursor does lose access to Open AI?

01:29 Pras

Um, I I I think it’s I think it’s something around that the Cursor, uh, Cursor clients, about 5% of them use Open AI models, right? So, uh, it’s not nothing but there’s a certain that is a good amount of clients that would potentially leave Cursor if they can’t use Open AI models, uh, for their coding, right?

01:54 Pras

So, that could be a problem. Now Anthropic is saying that they’re going to ramp up access uh to some of their uh to their model. So that’s going to be on the flip side there. Anthropic is going to be pushing more Cursor use, but you know, uh from what I understand, uh Open AI’s models like Codex and things like that are really, really good when it comes to um development and AI coding.

02:08 Speaker A

Just remind us, Pras, take a step back. Why did Musk want Cursor in the first place? Like what is he trying to build here?

02:17 Pras

So basically, Cursor is an AI coding agent, right? So it it it it features like something like it sits on top of a development environment and it allows a a a developer or a person to sort of search across a codebase, edit files, run terminal commands, things like that. And then the agent can also carry out different like multi-step tasks and basically be the assistant as I understand it to to for a developer or a coder. So, uh it’s sort of a big deal these days. It seems like many technology companies all use coding agents like Cursor as a de facto sort of tool.

02:51 Pras

So, uh this is a big deal and I think this is part of the whole gambit that SpaceX is going into the AI business, right? When they when they started building their own data centers, they want to build data centers in space. Uh, they have products like Groq, uh, and they want to use AI as a way to expand the entire business of SpaceX.