OpenAI announced late last Friday that it is winding down its partnership with Cursor, the AI coding tool startup recently acquired by SpaceX in a $60 billion deal. The stated reason: OpenAI says it cannot trust Elon Musk's companies to honor contracts, citing experience with violations. As a result, OpenAI is giving up a customer that, by spring 2026, was projected to bring in over $1 billion in annualized revenue, according to sources familiar with the matter. At the start of 2026, Cursor ranked among OpenAI's top five customers by revenue.
The decision highlights the financial cost OpenAI is willing to absorb to avoid doing business with Musk. OpenAI declined to comment, and SpaceX and Cursor did not respond to requests for comment. In a blog post, OpenAI said it chose to end the partnership because it cannot be confident SpaceX will use its technology within terms of service. The company also noted that earlier this year, Musk allegedly said xAI-now part of SpaceX-used OpenAI's models for training, an apparent admission during a deposition in a lawsuit that a federal jury later dismissed.
OpenAI, which is preparing for a public offering next year and reportedly generates over $40 billion in annualized revenue, acknowledged the move may hurt its standing with developers by cutting off a key access channel to its models. Cursor founder Michael Truell responded on X, claiming OpenAI models serve only about 5% of Cursor user traffic. OpenAI's head of core products, Thibault Sottiaux, countered that token usage is not a proxy for revenue and asked Truell to share the math behind that figure.
The two companies have a long history: OpenAI's startup fund invested in Cursor's 2023 seed round, and Truell appeared in OpenAI's GPT-5 marketing materials in 2025. OpenAI had previously approached Cursor about an acquisition, though talks did not progress. Following the breakup, Anthropic's cofounder Tom Brown said his company will continue offering Claude models in Cursor. Notably, Anthropic depends on Musk's SpaceX for $45 billion in data center capacity, a factor that may influence its willingness to keep working with Cursor, especially after Anthropic previously cut off another AI startup, Windsurf, when OpenAI was rumored to be acquiring it.
Source: Wired