OpenAI has said it will terminate its use of the AI coding service Cursor, which is owned by Elon Musk’s SpaceX, marking yet another development in a rocky partnership between the two founders. It follows a series of worries stemming from OpenAI’s fears about what the technology could be applied to after SpaceX acquired Anysphere, the developer behind Cursor, and follows a long-standing feud between Musk and OpenAI’s leadership.
OpenAI said Friday it plans to end its subscription of its AI models to Cursor, as it no longer believes SpaceX is using the technology in compliance with the OpenAI terms of use. The choice is a major milestone for Cursor, a leading AI-powered coding tool that has been powered by models from various top AI firms.
The dispute has strong ties to the ongoing feud between Musk and Altman. Once the two were allies in the early days of OpenAI, but they have now turned into competitors. Their dispute has grown from one on how to develop AI into a legal and corporate battle.
In a public release, OpenAI stated that “We are taking this action because we don’t have confidence that SpaceX will abide by our terms of service based on experience with Elon Musk’s companies violating contracts.” The move suggests that enforcing compliance and monitoring the use of the firm’s AI systems has grown increasingly important in these waters of evolving company ownership.
Reacting to the news, Musk said on X: “I couldn’t care less.” He also called Altman and OpenAI’s CEO Greg Brockman “untrustworthy” and restated his decades-old allegation that OpenAI abandoned the OpenAI mission that accompanied its founding as a nonprofit.
The feud between Musk and OpenAI has been ongoing for a while now. Earlier, Musk filed a massive lawsuit against OpenAI and Altman, accusing the organization of straying from its original mission of operating as a non-profit and instead going into business. The switch, Musk said, was “a betrayal of the founding principles” of the company. OpenAI has denied those claims and stated that it was the company desired a stronger management grip.
The lawsuit put another obstacle in the path of competition between the two tech gurus. In court, both sides took opposing sides of the story with regard to the path OpenAI’s organization has taken and its history. A federal jury eventually determined this year that Musk’s lawsuit was late.
Even though the litigation has been unsuccessful, legal issues remain an issue in their business dealings. OpenAI’s move toward Cursor shows the competition can take place in more than just in the courtroom and in public comments.
Anysphere, an AI software company, created Cursor to assist computer coders in writing, understanding and modifying computer code by using artificial intelligence. This service has gained significant popularity, as developers become more reliant on AI tools for programming and software development.
In June, SpaceX announced it was buying Anysphere for about $60 billion in an all-stocks transaction. The deal closed earlier this month, andCursor is now part of Musk’s aerospace company. The deal appears to have been doomed to failure because of clauses in OpenAI’s deal with Cursor, which enabled the AI company to rethink the deal when it was hit by the change of ownership.
OpenAI noted that its combination contracts with big business partners usually feature explicit provisions to deal with ownership transfers and make sure that its technology remains in use in line with agreed-upon conditions. We would normally use custom contracts to make sure that the integration is safe at scale, and that it’s compliant with our terms of service, which is why we use them with a big partner like SpaceX,” the company said.
The deal with Cursor will be subject to its agreement that allows Cursor to terminate it after a change of control for a “limited period,” according to OpenAI. On November 12, 2026, OpenAI has suggested that it will cease providing the models to Cursor.
The suggested cancellation doesn’t imply that Cursor will cease to have access to sophisticated AI models. It has already partnered with several AI vendors, and is able to move even more workload to other systems. OpenAI’s primary rivals, Anthropic, showed early signs that it would be ready to continue offering Claude models in Cursor.
The company was in talks with OpenAI as part of its efforts to resolve the dispute, said Michael Truell, a co-founder and current executive at SpaceX. The breakup is likely not permanent, though, since his remarks indicate the two companies might still be able to work it out at the end of the day.
Anthropic also has an existing relationship with SpaceX, which makes its involvement even more important. Just hours after the announcement by OpenAI, Anthropic announced they will expand computing resources on their Cursor platform for Claude models. The development could help Anthropic build up its foothold in the fiercely contested space of AI coding tools, while also providing Cursor with an alternative should OpenAI’s planned shutdown come to fruition.
