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OpenAI cuts off Cursor after SpaceX acquisition, citing Musk's history of breaking contracts
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OpenAI has announced it will terminate its contract with the AI coding tool Cursor, effective November 12, 2026, following SpaceX's acquisition of the company. The decision comes after SpaceX, led by Elon Musk, completed its purchase, which OpenAI says triggered a change-of-ownership clause in their agreement. This clause allows OpenAI to end the partnership within a limited window post-acquisition.
OpenAI cites a fundamental issue of trust as the primary reason for the termination. Thibault Sottiaux, an OpenAI representative, stated, "It boils down to trust." The company expresses concern that SpaceX may not adhere to the original terms of service, pointing to Musk's history with contractual obligations.
This move is the latest development in a long-standing public feud between OpenAI and Elon Musk, which has previously involved legal disputes. OpenAI specifically references Musk's actions after acquiring Twitter (now X), where he allegedly breached a data licensing agreement. The company had paid about $2 million annually for access to Twitter's full tweet data for training ChatGPT, but Musk terminated the access in December 2022, claiming the price was too low.
OpenAI further accuses Musk of violating its terms of service by using "distillation"—employing data from other labs' AI models, including OpenAI's, to train his own Grok models. This practice was admitted by Musk during their legal battles. OpenAI also frames the current decision as a safety issue, alluding to the advanced capabilities of its upcoming Astra model and the need for heightened partner accountability.
In response, Cursor co-founder Michael Truell stated that OpenAI models account for only about five percent of Cursor's AI traffic. He emphasized the long-standing trust Cursor has placed in OpenAI as neutral infrastructure and confirmed that discussions are underway to find a solution. Users accessing GPT models through Cursor will still be able to use their own OpenAI API keys.
The situation reflects a pattern of increasing friction in the AI industry over data and platform access. In a parallel move, Anthropic previously blocked the coding tool Windsurf from accessing its Claude models in June 2025, reportedly due to OpenAI's acquisition interest. Later, in August 2025, Anthropic revoked OpenAI's own API access after discovering its teams had used Claude for internal benchmarks.
Looking ahead, the termination highlights the growing complexities of partnerships in the rapidly consolidating AI sector. As major players like OpenAI and Musk's ventures expand, issues of trust, data rights, and competitive strategy are likely to intensify. The resolution between OpenAI and Cursor, and the broader implications for developer tools, remains to be seen.
