OpenAI to end Cursor contract in November after SpaceX acquisition

OpenAI says it's ending the contract that supplies GPT models to Cursor, with the termination set for November 12. The decision comes just two weeks after SpaceX acquired Cursor on August 15. In a post on its official blog, OpenAI explains that it's applying the maximum grace period allowed under the contract, pushing the end date as far out as it can. The reasoning is straightforward: Elon Musk's companies have a track record of breaking contracts, so OpenAI says it can't be confident SpaceX will actually abide by its terms of service. OpenAI points to two examples — Musk breaking a data-usage agreement over tweet data after acquiring Twitter, and xAI's recent court testimony admitting it violated provisions similar to OpenAI's own terms of service.

To make sense of this, it helps to understand what Cursor actually is. Cursor is an AI-powered code editor that lets developers pick from Anthropic's Claude, OpenAI's GPT, or Google's Gemini right inside the interface. At the same time, Cursor trains and ships its own model called Composer, meaning the company both relies on other providers' models and builds its own. That structure means losing access to OpenAI doesn't leave Cursor without options — there are already several alternatives built in.

This isn't the first clash between OpenAI and Musk. Musk co-founded OpenAI in 2015 before splitting off, and his own company xAI has since gone to court against OpenAI. Since the acquisition closed, Cursor employees have reportedly moved onto a shared SpaceX-xAI Slack, and 45 people are said to have left the company since April. OpenAI also noted that its upcoming model, Astra, will have advanced cyber capabilities, which it says raises the stakes for confirming that partners actually comply with its terms.

Cursor co-founder Michael Truell responded quickly, saying OpenAI models account for only about 5% of Cursor's AI traffic and that his team is discussing solutions with OpenAI. According to The Decoder, OpenAI's Tibor said the move ultimately comes down to "a question of trust," emphasizing that the decision targets Musk personally rather than the coding-tool industry as a whole. Cursor users will reportedly still be able to use GPT after the contract ends by plugging in their own OpenAI API keys, and access through OpenAI's IDE extension will also remain available.

Blocking a competitor's access isn't new territory for OpenAI. In June 2025, Anthropic cut off Windsurf's access to Claude amid reports that OpenAI was trying to acquire Windsurf, and two months later, Anthropic cut off OpenAI's own API access. The Cursor case looks set to become another example of how, in the AI coding-tool market, relationships between model providers and tool developers can be severed at any moment depending on who's acquiring — or competing with — whom.

You may also want to check out the related story on SpaceX approaching Cognition about an acquisition just four days after buying Cursor.