OpenAI Cancels Cursor Partnership Citing Distrust of Elon Musk

OpenAI is ending its relationship with Cursor following that company’s acquisition by SpaceX.

The artificial intelligence startup announced the change Friday (Aug. 28), saying it was driven by OpenAI’s contentious relationship with SpaceX head Elon Musk.

“This decision was incredibly tough, as we care deeply about our models being broadly available for developers,” OpenAI wrote on its website. “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.”

Open plans to wind down its contract with Cursor to provide the company AI models, with a proposed shutdown date of Nov. 12, the announcement said.

OpenAI added that, when working with a larger partner like SpaceX, it typically uses custom contracts to “ensure compliance with our terms of service and that the integration provides for safety at scale.”

When Musk acquired Twitter, now X, in 2022, the company broke the terms of its contract with the ChatGPT maker, OpenAI argued.

“Under oath earlier this year, Musk admitted⁠ that xAI, now also part of SpaceX, had violated OpenAI’s terms of service (terms which are similar to xAI’s own),” the company added.

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Responding to the news in a post on X, Musk wrote: “I couldn’t care less. Scam Altman and Greg Stockman are utterly untrustworthy [expletives]” in reference to OpenAI CEO Sam Altman, reiterating his claim that the executives “stole an open source nonprofit.”

Musk in 2024 sued OpenAI, Altman and Brockman after co-founding and helping to finance the startup in 2015.

In his lawsuit, Musk alleged that OpenAI’s restructuring was a violation of its founding commitments. OpenAI disputed these claims. Musk lost his suit and has said he will appeal.

SpaceX acquired Cursor, an AI coding startup, for $60 billion in June, soon after the Musk-owned company went public.

As PYMNTS wrote soon after, the deal was part of a strategy that had taken shape when SpaceX absorbed xAI, an AI lab also owned by Musk and the maker of the Grok chatbot, in February. That deal valued the combined entity at $1.25 trillion.

“The merger gave SpaceX the computing infrastructure but not the product. Cursor supplied what xAI couldn’t: a widely adopted AI coding tool with a large base of professional software engineers already paying for it,” the report said.

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