OpenAI Ends SpaceX Cursor AI Deal as Musk-Altman Feud Escalates
OpenAI Withdraws AI Support Amid Intensifying Dispute
OpenAI Terminates AI Model Access for Cursor
Aug 28 (Reuters) - OpenAI said on Friday that it plans to stop providing AI models to Cursor, the coding-tool company now owned by Elon Musk's SpaceX, in a further escalation of the bitter rivalry between OpenAI CEO Sam Altman and Musk.
SpaceX Acquisition of Cursor
SpaceX announced a deal to buy Anysphere, the startup behind Cursor, for $60 billion in an all-stock deal in June, and completed the acquisition earlier this month.
OpenAI's Stance and Reasoning
"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 blog post.
Responses from SpaceX and Cursor
Efforts to Resolve the Issue
Michael Truell, a co-founder of Cursor and now an executive at SpaceX, said that they were speaking with the OpenAI team to resolve this issue.
"Cursor was one of the very first users of OpenAI, we’ve worked closely with their team for years, and we’ve trusted their platform to be neutral infrastructure for our business," Truell said in an X post on Friday.
Background: The Musk-Altman Feud
Legal Battles and Accusations
Musk and Altman have been at odds for years, a feud that culminated in a trial. During the trial, Musk's lawyer said that Musk and other witnesses had testified that Altman was a liar, while OpenAI argued that Musk had sought control of the company.
Musk's Lawsuit Against OpenAI
Musk, the world's richest person, had sued OpenAI for $150 billion, accusing the company and Altman of "stealing a charity" by betraying its original nonprofit mission for their own enrichment. A federal jury ruled against Musk earlier this year, finding that he had filed the case too late.
Contractual Disputes with X (formerly Twitter)
In its blog post, OpenAI said that X, formerly known as Twitter and now part of SpaceX, had breached the terms of its contract with OpenAI after Musk acquired the platform.
"To work with a large partner like SpaceX, we typically rely on custom contracts to ensure compliance with our terms of service and that the integration provides for safety at scale," the AI company added.
Future of Cursor and AI Partnerships
Contract Termination Timeline
The ChatGPT-maker said it proposed a shutoff date of November 12, 2026, adding that its agreement with Cursor gave it a limited time window to cancel the contract following "a change of control."
Cursor's Model Offerings
Cursor offers Grok models developed with SpaceXAI among its first-party models, while also allowing users to access frontier models from OpenAI, Anthropic and Google, according to its website.
Reporting Credits
(Reporting by Anusha Shah and Shubham Kalia in Bengaluru; Editing by William Mallard)
