ChatGPT maker OpenAI on Friday said that it will end its partnership with the AI-powered code editor Cursor. The announcement follows SpaceX’s acquisition of the AI-coding agent through a $60 billion stock deal on August 14. Cursor is now a major shareholder in the $1.7 trillion public empire.
OpenAI said that the decision to end the relationship was made on the basis of trust and confidence, which can further fuel the feud between the OpenAI CEO Sam Altman and SpaceX founder Elon Musk.
“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 said in a statement issued on August 28.
The AI company explained SpaceX had previously broken the terms and conditions of a contract with them. The company referred to an instance when Musk admitted that xAI used OpenAI’s technology to train its own AI models, a process commonly called distilling.
OpenAI proposed an end date for the contract of November 12, 2026. The company acknowledged its relationship with Cursor and noted that the move will impact the developers who rely on their models.
“We’ve worked with Cursor for nearly four years and have enormous respect for their team, their product, and what they’ve built for the developer community. We know that the people most affected by this decision are the developers who rely on OpenAI models in Cursor. We care about their experience in this transition, and we’re ready to go above and beyond to support them,” the statement read.
According to Reuters, Cursor co-founder Michael Truell, now an executive at SpaceX, said that they are in talks with the OpenAI team to resolve the issue.
The rivalry between the OpenAI and SpaceX dates back to a lawsuit filed by Musk in February 2024, accusing the OpenAI of breaching a non-profit contract by shifting the company to a for-profit company. The SpaceX founder donated $38 million early in the company’s history, which triggered the case.
The case was subsequently closed and reopened multiple times by Musk himself and was ultimately closed by a May 2026 court ruling. The jury concluded that he was well aware of OpenAI’s transition toward a commercial, for-profit structure years ago and missed his chance to file a case.
