OpenAI ended its partnership with Cursor. Cursor was a top customer, worth over $1 billion.
The breakup follows SpaceX's $60 billion acquisition of Cursor.
OpenAI fears Musk's companies could misuse its technology.
What happened
OpenAI announced it would wind down its partnership with Cursor, the AI coding tool startup, because SpaceX—now Cursor's owner after a $60 billion acquisition—couldn't be trusted to comply with its terms of service. OpenAI cited its experience with Elon Musk's companies violating contracts.
Why it matters
Cursor was one of OpenAI's top five customers by revenue at the start of 2026, projected to bring in over $1 billion in annualized revenue. Despite this loss, OpenAI is preparing for a public offering next year and reportedly generates over $40 billion in annualized revenue, lessening the financial blow but risking developer trust.
What to watch
Cursor's CEO Michael Truell claimed OpenAI models serve only about 5% of Cursor user traffic, a figure OpenAI's Thibault Sottiaux challenged. Anthropic will continue to offer Claude models in Cursor, though Anthropic's dependence on SpaceX for $45 billion of data center capacity may influence that decision.
Ask the AI about this article →
OpenAI's decision to walk away from Cursor highlights its effort to distance itself from Elon Musk, especially as it prepares for an initial public offering. The company is reportedly generating over $40 billion in annualized revenue from multiple streams, making the loss of a billion-dollar customer more manageable than in earlier years. However, the move risks alienating developers who used Cursor as a channel to access OpenAI's models, a community OpenAI has worked to win over.
Cursor and OpenAI have a long history, with OpenAI's startup fund investing in Cursor's 2023 seed round. Despite growing competition between Cursor and OpenAI's own coding tool, Codex, the companies coexisted as partners and rivals. The acquisition by SpaceX changed that calculus, as OpenAI now fears its models might be used to train xAI's systems, a concern raised by Musk's deposition in his lawsuit against OpenAI.
Anthropic's decision to keep Claude on Cursor adds another layer, as it has a $45 billion data center deal with SpaceX, potentially forcing it to maintain ties despite any ideological conflicts. OpenAI's breakup with Cursor suggests trust and strategic considerations can outweigh even substantial revenue, a sign of the complex dynamics in AI partnerships.
For example, today's edition would include:
AI-summarized, only the topics you pick — one digest a day via Email, Slack, or Discord.
Free · takes 30 seconds · unsubscribe anytimeWhat is AIToday? →
Ask AI anything about this article. Q&As are published on this page for other readers too.
On September 4, 2026, multiple AI services experienced outages
Meta Platforms stock rose 4% to $614.57 after the company released Muse Spark 1.3, an upgraded AI model
OpenAI, Google, and Meta can build AI infrastructure faster than the U.S
Nvidia has agreed to buy Hugging Face for $13 billion
Google has started rolling out voice assistant modes for Gmail, Docs, and Keep, called Gmail Live, Docs Live…
Nvidia has announced PAIR (Personal AI Router), a free open-source software tool that connects compatible home…
