OpenAI will terminate the contract under which it supplies its models to the Cursor programming tool. The company informed SpaceX of the decision and is proposing November 12, 2026, as the shutdown date. It does not believe Musk’s company will use the technology in accordance with the contractual terms.
SpaceX bought Cursor
SpaceX has completed its acquisition of Anysphere, the company behind Cursor. The deal was worth $60 billion and paid entirely in shares. SpaceX had held an option to buy Cursor since April, when the two companies began jointly training a model. It exercised the option two months later.
The collaboration had already been deepening before the agreement was signed. In July, SpaceXAI and Cursor jointly trained the Grok 4.5 programming model using tens of thousands of Nvidia GB300 chips. SpaceX had previously absorbed Musk’s AI-focused company xAI. Cursor had earlier rejected two acquisition offers from OpenAI because its management wanted to remain independent.
Why OpenAI is citing a lack of trust
In its statement, the company wrote that it could not be certain the rules would be followed. It referred to its experience with Musk’s companies violating agreements and specifically mentioned two cases. After Musk bought Twitter, which is now part of SpaceX, the social network violated the terms of its contract with OpenAI. This year, Musk also admitted under oath that xAI, which is now also under the SpaceX umbrella, had violated the terms of use for OpenAI’s services. The admission came during cross-examination in a court case, where Musk said that xAI had trained its models on OpenAI outputs, a practice known as distillation.
OpenAI was able to terminate the contract only because of a single clause. Its individual agreement with Cursor gives it a limited window in which to cancel contracts following a change of ownership. The company decided to use this option but set the delay to the latest date permitted by the contract.
The Astra model is another reason
The announcement also included an argument concerning not the past, but technology currently under development. OpenAI wrote that as artificial intelligence becomes more capable, it bears greater responsibility for ensuring that its forthcoming Astra system is used in accordance with the terms. It will therefore not provide Cursor with any future models, although the existing ones will continue operating until the November deadline.
The company described the decision as extremely difficult, adding that it has worked with Cursor for nearly four years and values both its team and its product. According to OpenAI, the developers who use its platform through Cursor will be affected the most by the change.
OpenAI accounts for only 5 percent
Cursor co-founder and CEO Michael Truell responded on X, writing that these models handle approximately five percent of user traffic and that his team is discussing a solution with OpenAI. He also noted that Cursor was among OpenAI’s very first customers and had relied on its platform being neutral infrastructure for its business.
Five percent is a small share for a provider of such prominence. At the same time, Cursor is the most valuable application company ever built on another company’s software. It has since developed its own open-source-based programming model, Composer 2.5, significantly reducing its dependence on external cutting-edge models.
We’re sorry to see that OpenAI put out a note saying they plan to block Cursor users from accessing OpenAI models in three months.
— Michael Truell (@mntruell) August 29, 2026
OpenAI models serve about 5% of Cursor user traffic, and we’re speaking with the OpenAI team to resolve this.
Cursor was one of the very first…
Musk responded with mockery
On X, Musk lashed out at OpenAI CEO Sam Altman and company president Greg Brockman, repeating his claim that they had stolen an open-source nonprofit organization. Elsewhere, he dismissed the entire move by saying that he did not care. Musk co-founded OpenAI as a nonprofit organization in 2015 and left its board in 2018. In 2024, he sued the company over its transition to a commercial model. In May this year, a jury ruled against him, but he immediately announced an appeal.
Competitors quickly joined the debate. Anthropic co-founder Tom Brown wrote that his company would continue increasing computing capacity for the Claude models integrated into Cursor and that he was interested to see where its development under SpaceX would lead. However, he was criticized for the comment. Replit CEO Amjad Masad reminded him that Anthropic itself had cut off the competing Windsurf tool from its model last June.
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
