OpenAI cuts Cursor access Nov 12 after $60B SpaceX deal

OpenAI will cut Cursor's access to its models by November 12, saying it cannot trust SpaceX — which acquired the coding startup for $60 billion this month — to honor its terms of service.

"This decision was incredibly tough, as we care deeply about our models being broadly available for developers," OpenAI said in a statement published Friday. "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."

OpenAI pointed to past conduct by Twitter, which Musk bought in 2022 and merged with SpaceX in February. The company cited a New York Times report that Musk cut off OpenAI's access to Twitter's data, and noted that Musk admitted under oath earlier this year that xAI had violated OpenAI's terms by training Grok from OpenAI's output. The custom agreement with Cursor gave OpenAI a limited window to cancel after a change of control.

The decision affects developers who rely on OpenAI's GPT-5.6 Luna, Sol, and Terra models through Cursor. OpenAI said it will not provide future models to Cursor, including its upcoming Astra model. The move escalates the feud between Musk and OpenAI CEO Sam Altman, which began with Musk's 2024 lawsuit over OpenAI's shift from nonprofit to for-profit.

Cursor, which offers models from OpenAI, Anthropic, Google, and SpaceXAI inside its software, becomes the latest casualty of the Musk-Altman rivalry. The startup's website lists OpenAI's GPT-5.6 Luna, Sol, and Terra models for paid users. SpaceX confirmed the $60 billion acquisition of Cursor earlier this month, giving the coding startup access to SpaceX's computing power.

OpenAI said it typically relies on custom contracts with large partners like SpaceX to ensure compliance with its terms of service and safety at scale. The company said it is giving the maximum notice provided by its contract to allow developers time to transition. OpenAI also said it has "enormous respect" for Cursor's team and product, and that it cares about the developers affected by the transition.

The Musk-OpenAI feud deepens

The contract termination is the latest escalation in a dispute that began in 2024 when Musk, an OpenAI cofounder and early backer, sued the company and Altman over its shift from a nonprofit research lab to a partially for-profit entity. In May, a federal jury found that Musk waited too long to bring the case forward, missing the statute of limitations. Musk said he plans to appeal.

OpenAI did not accuse Cursor of violating any terms itself. Instead, it pointed to Twitter's past conduct and Musk's own admission that xAI had distilled OpenAI's models. Musk said at the time it was "partly" true that xAI had distilled OpenAI's models, The Verge reported in April.

The decision also carries implications for the broader AI model distribution market. OpenAI's move to withhold its upcoming Astra model from Cursor — even as it continues to supply existing models until November 12 — suggests the company is willing to use model access as leverage in corporate disputes. This could affect how AI coding tools negotiate with model providers going forward, as the market for AI developer tools becomes increasingly concentrated.

The decision reshapes the competitive dynamics of the AI coding assistant market, where Cursor competes with GitHub Copilot, Anthropic's Claude Code, and Google's Gemini Code Assist. Developers using Cursor will need to migrate to alternative model providers or coding tools by November 12, potentially benefiting Anthropic and Google, which also supply models to Cursor. OpenAI's decision to withhold its upcoming Astra model from Cursor shows that the company views model distribution as a strategic lever in its rivalry with Musk's expanding AI footprint.

This article is for informational purposes only and does not constitute investment advice.