OpenAI Ends Cursor Partnership After SpaceX $60B Buyout

SpaceX purchased the AI coding assistant Cursor on August 14, and within two weeks OpenAI started the process of blocking it from its models. Access will stop on November 12.

Cursor is a top coding helper for software engineers. Its $60 billion all-stock sale moved it into Elon Musk's orbit. OpenAI considered that sufficient cause to exit.

OpenAI’s Reasons for Ending the Partnership

OpenAI did not accuse Cursor of misconduct. Instead, it invoked a change-of-control provision, a contractual clause that allows termination when ownership changes hands.

We’re ending our partnership with Cursor following its acquisition by SpaceX. Under our proposal, Cursor’s direct access to our models would end on November 12.

We know that the people most affected by this decision are the developers who rely on OpenAI models in Cursor. We care…

— OpenAI (@OpenAI) August 29, 2026

OpenAI cited a lack of trust, stating it cannot guarantee that SpaceX will adhere to its guidelines. It highlighted two specific incidents.

• X (Twitter), which Musk acquired in 2022 and later merged into SpaceX, had violated a previous agreement with OpenAI.

• During a California court hearing on April 30, Musk was asked by an attorney if xAI had used distillation on OpenAI models to develop Grok.

Distillation involves repeatedly querying a competitor’s model to replicate its knowledge. Musk initially claimed that all AI firms engage in this practice. Further questioning led him to admit that xAI had done so to some extent.

He was giving evidence in his own legal action against OpenAI. Three weeks later, a jury threw out his lawsuit on the grounds that it was brought too late.

OpenAI also imposed an additional restriction. Its upcoming flagship model, Astra, will never be distributed via Cursor.

Cursor Minimizes the Blow

Cursor co-founder Michael Truell, who now works for SpaceX, estimated the loss at about 5% of user traffic. He said discussions with OpenAI remain ongoing.

“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 expressed.

It appears Elon Musk is unwilling to negotiate. In his first comment, he expressed that he ‘couldn’t care less’ and described Sam Altman and OpenAI president Greg Brockman as unreliable.

I couldn’t care less. Scam Altman and Greg Stockman are utterly untrustworthy assholes who stole an open source nonprofit.

— Elon Musk (@elonmusk) August 29, 2026

Anthropic took a different approach. Co-founder Tom Brown announced that it would increase compute capacity to improve Claude’s performance within Cursor.

“Cursor has been a trusted partner of Anthropic since Sonnet 3.5. We’ll continue to increase compute to support Claude models in Cursor and are excited for what comes next with them at SpaceX,” Brown shared in an early Saturday post.

OpenAI is not protecting revenue equivalent to 5% of a single client. It is simply refusing to do business with Musk. Developers must choose a new provider by November 12, and Cursor already directs users to SpaceXAI’s Grok models, Claude, and Gemini.