OpenAI, the leading Artificial intelligence company, on Friday announced that it will end its partnership with Cursor. This development followed SpaceX acquisition of the AI-coding agent, signaling further escalation of the bitter rivalry between OpenAI CEO Sam Altman and SpaceX founder Elon Musk. The ChatGPT maker blamed trust issues for winding down their contract and said that it was not confident that SpaceX would use its technology “within our terms of service.”
With a proposed shutoff date of 12 November, Cursor received 76 days of notice following which its will be withdrawn. The deal between Elon Musk’s SpaceX and the coding-tool company triggered a contract clause allowing OpenAI to withdraw its models.
OpenAI blames trust issues with Cursor after SpaceX buyout
OpenAI in a statement issued on 28 August (local time) said, “Today, we notified SpaceX that we intend to wind down our contract providing OpenAI models to Cursor, with a proposed shutoff date of November 12, 2026. To maximize the time that developers can retain access to our models through Cursor, we are giving the maximum notice provided by our contract. This decision was incredibly tough, as we care deeply about our models being broadly available for developers. 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.”
This major decision was taken while taking into account past instances where Elon Musk’s xAI violated OpenAI’s terms of service. Musk and longstanding feud dates back to trial after the Tesla chief sued OpenAI for $150 billion, accusing the company and Altman of “stealing a charity”.
OpenAI in its note stated, “To work with a large partner like SpaceX, we typically rely on custom contracts to ensure compliance with our terms of service and that the integration provides for safety at scale. After Musk acquired Twitter, now part of SpaceX, the company broke(opens in a new window) the (alongside many others). Under oath earlier this year, Musk admitted(opens in a new window) that xAI, now also part of SpaceX, had violated OpenAI’s terms of service (terms which are similar to xAI’s own).”
The coding-tool company now owned by Elon Musk’s SpaceX will no longer receive any of OpenAI’s future model contracts. OpenAI acknowledged their 4-year relationship with Cursor and at the same time stressed that this move will adversely impact “developers who rely on OpenAI models in Cursor”. It further noted that the company tried to “hold the contract cancellation to the latest date.”
However, Cursor co-founder Michael Truell, who is now an executive at SpaceX, said that they were in talks with the OpenAI team to resolve the issue, Reuters reported. Shortly after OpenAI’s public announcement, Michael Truell in a post on X wrote, “Cursor was one of the very first users of OpenAI, we’ve worked closely with their team for years, and we’ve trusted their platform to be neutral infrastructure for our business.”
More about SpaceX-Cursor deal
In June, SpaceX announced an all-stock deal to take over Anysphere, the startup behind Cursor, for $60 billion. The acquisition was completed earlier this month.