OpenAI said Friday it plans to terminate its partnership with Cursor, the AI-powered coding tool now owned by SpaceX, by November 12, 2026 — the maximum notice period allowed under their contract. The decision marks a dramatic new chapter in the years-long feud between OpenAI CEO Sam Altman and Elon Musk.
In a company blog post, OpenAI framed the cutoff as a matter of trust, alleging that it cannot be confident SpaceX would use its technology in accordance with OpenAI's terms of service, citing what it described as a pattern of violations by Musk's companies. Specifically, OpenAI alleged that X breached its contract terms after Musk's acquisition, and noted that Musk himself admitted under oath earlier this year that xAI had also violated OpenAI's terms of service.
The dispute traces back to SpaceX's $60 billion acquisition of Anysphere, the startup behind Cursor, completed in August. Cursor had become one of the most widely used AI coding tools, hitting $4 billion in annualized revenue by May 2026. The contract included a limited window for cancellation following a change of ownership — a provision OpenAI is now invoking.
Musk responded on X with characteristic bluntness, writing that he could not care less while calling Altman and OpenAI president Greg Brockman untrustworthy and repeating his long-standing claim that the pair stole an open source nonprofit.
Michael Truell, Cursor's co-founder and now a SpaceX executive, struck a more conciliatory tone, saying the company was in talks with OpenAI to try to resolve the dispute.
In a swift competitive response, Anthropic — which has an ongoing partnership with SpaceX — announced it would increase compute support for its Claude models within Cursor, positioning itself as the alternative AI backbone for the tool's millions of developer users.
For the developer community, the immediate question is what happens to Cursor's user base. The tool had become the de facto standard for AI-assisted coding, and the loss of OpenAI's models could push users toward alternatives. Anthropic's rapid move to fill the gap may determine whether Cursor retains its market position under SpaceX ownership.
