OpenAI Cuts Off Cursor Models After SpaceX Acquisition

Artificial Intelligence & Machine Learning
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Next-Generation Technologies & Secure Development

OpenAI Cites Distrust of Musk as Cursor Faces Growing Pressure From Rival Coding Tools

Emilia David •
August 31, 2026    

See Also: A Darkening Landscape: AI, Friend and Foe of Cyber Resilience

OpenAI’s move comes as the open, multi-model coding platform is being squeezed by integrated tools from the model providers themselves. OpenAI CEO Sam Altman and the mercurial Musk have a long-running feud dating from the founding of OpenAI (see: Musk v. Altman: A Warning for Enterprise AI).

OpenAI said it will end support for Cursor on Nov. 12, saying that it wants to give developers using its models on Cursor “the maximum notice provided by our contract.”

“We are making this choice because we cannot be confident that SpaceX will use our technology within our terms of service, based on our experience with Elon Musk’s companies violating contracts,” OpenAI said.

The company said it has a custom agreement with Cursor that gave it a limited time to cancel after a change in leadership. SpaceX – increasingly an umbrella company for Musk companies such as the X social media network and xAI – announced in June it would acquire Cursor parent company Anysphere for $60 billion. The acquisition gives SpaceX access to Cursor’s customer base of developers using its coding agents, while Cursor can use SpaceX’s supercomputer to develop new models (see: SpaceX Bets Big on AI Coding With $60B Cursor Deal).

OpenAI claimed in its blog post that its history with other Musk companies informed its decision. It said it previously had a contract with X predecessor Twitter in which OpenAI used posts on the platform to train its models. Once Musk bought the social media network, it broke the contract, OpenAI said. It also said xAI violated OpenAI’s terms of service.

Cursor co-founder and CEO Michael Truell said in a post on X that his company had reached out to OpenAI to discuss the situation. He said OpenAI models “serve about 5%” of user traffic.

“Cursor was one of the very first users of OpenAI, we’ve worked closely with their team for years and we’ve trusted their platform to be neutral infrastructure for our business,” Truell said.

ISMG has reached out to Cursor for additional comment.

Cursor exceeded $1 billion in revenue in November and is valued at $30 billion. It faces a progressively more competitive market in the agentic coding space. Based on a report from AI company JetBrains, offerings from model providers like OpenAI and Anthropic are growing. Claude Code has become the most widely adopted AI coding tool by developers, followed by GitHub Copilot, which was once the leader, and then OpenAI’s Codex. Cursor saw a small decline in adoption and ranks fourth among the top platforms used by coders.

Of the top four coding agent platforms, GitHub and Cursor provide wider access to models while Codex and Claude Code both lock users into specific ecosystems.

Musk co-founded OpenAI, but the partnership soured dramatically. Musk sued OpenAI in August 2024, accusing the company and its executives, Sam Altman and Greg Brockman, “stole a charity” by transforming OpenAI from a non-profit into a for-profit corporation. Musk lost that case.