OpenAI to cut off Cursor after SpaceX acquisition

OpenAI announced on Friday that it will terminate its agreement to provide AI models to Cursor, the coding-tool company now owned by Elon Musk's SpaceX, citing concerns that SpaceX would not use its technology in compliance with its terms of service.reuters+1

The proposed shutoff date is November 12, 2026, which OpenAI said represents the maximum notice period allowed under its contract with Cursor.openai

Why OpenAI Pulled the Plug

In a blog post published August 28, OpenAI said the decision stemmed from a pattern of contract violations by Musk-affiliated companies. The company pointed to SpaceX's acquisition of Twitter, noting that after Musk took over the platform, it "broke the terms of our contract (alongside many others)." OpenAI also cited sworn testimony from Musk earlier this year in which he admitted that xAI, now part of SpaceX, had violated OpenAI's terms of service.openai

"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 wrote.openai

The company noted that its custom agreement with Cursor includes a limited time window to cancel following a change of control, and that advancing AI capabilities — including its upcoming model, Astra — require a "new level of accountability" around how its technology is deployed.openai

Impact on Developers

OpenAI acknowledged that developers who rely on its models through Cursor will bear the brunt of the decision. "We know that the people most affected by this decision are the developers who rely on OpenAI models in Cursor," the company said, adding that it is "ready to go above and beyond to support them" during the transition.openai

SpaceX acquired Cursor in mid-August 2026 for around $60 billion, according to TechCrunch reporting cited by Global Banking and Finance Review. SpaceX did not immediately respond to a Reuters request for comment sent outside regular business hours.globalbankingandfinance+1

Broader Context

The move underscores the deepening rift between OpenAI and Musk, who co-founded OpenAI before departing and later launched the rival xAI. With Cursor now integrated into SpaceX's AI operations, OpenAI's decision removes a key source of model access for one of the most widely used developer tools in the industry, escalating competition among OpenAI, SpaceX's AI division, and Anthropic.globalbankingandfinance