OpenAI plans to wind down its agreement to provide AI models to Cursor, escalating a growing dispute with Elon Musk after his aerospace company SpaceX acquired the coding software company.
OpenAI notified SpaceX on August 28 that it intends to end the contract, proposing November 12, 2026, as the cutoff date. The company said it is giving the maximum notice allowed under its agreement so developers have more time to prepare for the change.
The decision adds another chapter to the long running rivalry between OpenAI and Musk, who helped launch OpenAI before becoming one of its most outspoken critics.
Why OpenAI Is Ending the Agreement
OpenAI said its decision is based on concerns about whether SpaceX will use its technology in accordance with OpenAI’s terms of service.
The company pointed to what it described as previous contract violations involving Musk’s companies. OpenAI specifically cited the period after SpaceX acquired X, formerly known as Twitter, as well as an admission earlier this year involving xAI and OpenAI’s terms.
OpenAI said its agreement with Cursor includes a provision allowing the company to cancel the contract following a change in control.
The company also said its upcoming models require greater confidence that partners will comply with its rules for using advanced AI technology.
Cursor Was Recently Acquired by SpaceX
The dispute comes shortly after SpaceX acquired Cursor, an AI powered coding tool used by software developers.
Reuters reported that the acquisition was completed earlier in August in an all stock transaction valued at about $60 billion. The deal placed Cursor directly under Musk’s growing technology empire and changed the ownership situation behind OpenAI’s existing agreement with the company.
Cursor has become a major player in AI assisted software development, allowing programmers to use artificial intelligence to write, edit and work with computer code.
That makes OpenAI’s decision significant for developers who have relied on OpenAI models through Cursor.
Developers Have Options During the Transition
OpenAI said it understands that developers will be among the people most affected by the change and said it is prepared to support them during the transition.
OpenAI’s help center says Cursor users can continue accessing OpenAI models through several alternatives, including bringing their own OpenAI API key, using the Codex IDE extension or connecting through compatible AI gateway providers.
The company has proposed November 12 as the transition date, although Cursor could choose to end access sooner. OpenAI said the final termination date will be confirmed between the companies.
Cursor Says Talks Are Still Underway
Cursor has indicated that discussions with OpenAI have not necessarily ended.
According to Reuters, Cursor executive Michael Truell said the companies are still talking about the situation and could potentially reach a resolution.
That leaves open the possibility that the relationship could change before the proposed November deadline.
For now, however, OpenAI says it will not provide future models to Cursor under the existing arrangement while it works toward ending the contract.
Another Chapter in the Musk and OpenAI Feud
The dispute adds to a much broader conflict between Musk and OpenAI CEO Sam Altman.
Musk has repeatedly accused OpenAI of moving away from its original nonprofit mission. OpenAI has pushed back against Musk’s claims while continuing to expand its commercial AI operations.
Reuters reported that Musk responded to the latest dispute by repeating his criticism of Altman and OpenAI. The disagreement comes after years of legal and public battles between the two sides.
The Cursor situation gives that rivalry a new business dimension because it directly affects a widely used AI coding product and the models available to its customers.
What Happens Next
OpenAI’s proposed November 12 cutoff gives Cursor and its users several weeks to prepare for the possible loss of direct access to OpenAI models.
Cursor users who depend on OpenAI technology will have the option of using other models or connecting to OpenAI through alternative arrangements, according to OpenAI’s guidance.
The two companies could still reach an agreement before the proposed termination date. Until then, developers using Cursor will be watching closely as one of the biggest AI companies in the U.S. moves to end a relationship with a coding platform now owned by Musk’s SpaceX.