In a blog post on September 2, 2026, OpenAI announced it would terminate its partnership with Cursor, a startup known for its AI coding tools. OpenAI cited concerns about trust regarding Elon Musk, whose company SpaceX recently acquired Cursor in a $60 billion deal. This decision means OpenAI is stepping away from a significant customer, as Cursor was one of its top five revenue sources, projected to generate over $1 billion annually based on earlier performance.
OpenAI stated, "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." The company is preparing for a public offering and aims to present a stable business model that does not heavily depend on Musk's involvement. OpenAI reportedly generates over $40 billion in annualized revenue from various sources, including subscriptions and ads.
While losing Cursor may not severely impact OpenAI financially, the company acknowledged that ending the partnership could affect its relationship with developers. Michael Truell, Cursor's CEO, responded on X, suggesting that OpenAI's models account for only 5% of Cursor's user traffic, which may imply limited impact on Cursor's business. OpenAI's head of core products, Thibault Sottiaux, challenged this claim, emphasizing that token usage does not equate to revenue or value.
Despite the split, Cursor plans to continue offering third-party AI models, including those from Anthropic. The relationship between OpenAI and Cursor has evolved over time, with OpenAI initially investing in Cursor and considering an acquisition. The dynamics changed with Musk's acquisition of Cursor, leading to OpenAI's decision to end the partnership.
This development follows Musk's previous comments during a deposition regarding his lawsuit against OpenAI, where he mentioned using OpenAI's models for his own AI initiatives. The lawsuit was dismissed by a federal jury earlier this year. The history between OpenAI and Cursor includes various interactions, including marketing collaborations and investment discussions.