OpenAI drops Cursor over SpaceX acquisition

OpenAI has decided to terminate its relationship with Cursor, the startup behind one of the most popular AI-powered coding editors on the market. The move follows the acquisition of Cursor by SpaceX, Elon Musk's aerospace firm, in a $60 billion transaction. By walking away, OpenAI is sacrificing one of its most lucrative revenue streams. Cursor was projected to be one of OpenAI's top-five revenue-generating customers by the start of 2026, estimated to bring in more than $1 billion in annualized revenue. OpenAI, which currently generates over $40 billion in annualized revenue, stated it could not trust SpaceX to respect its terms of service, pointing to past contract disputes with Musk's other ventures.

The rift highlights the escalating tension between OpenAI and Musk. In its announcement, OpenAI referenced claims that xAI, another Musk-led venture, used OpenAI models to train its own systems. This move marks a sharp turn in what was once a close relationship. OpenAI's startup fund was an early investor in Cursor's 2023 seed round, and OpenAI even considered acquiring the startup. Cursor's chief executive officer, Michael Truell, who now leads teams at SpaceX, even appeared in marketing materials for OpenAI's GPT-5 model in the summer of 2025.

For software developers, this split reshapes the AI coding landscape. Users of Cursor will lose direct access to OpenAI's models, which OpenAI admits could hurt its standing with the developer community. However, Truell downplayed the impact, claiming that OpenAI's models "serve about 5% of Cursor user traffic." Thibault Sottiaux, OpenAI's head of core products, disputed this metric. Meanwhile, Anthropic has confirmed that its Claude models will remain available in Cursor. Anthropic's decision may be influenced by its reliance on SpaceX for $45 billion in data center capacity.

As OpenAI prepares for an initial public offering next year, it is actively positioning its own Codex tool to compete directly with Cursor. Practitioners must now choose between sticking with Cursor's multi-model ecosystem—which still features Anthropic's Claude—or transitioning to OpenAI's proprietary ecosystem to continue leveraging its latest models.