OpenAI Ends Billion-Dollar Deal with Cursor Over Trust Concerns About Elon Musk

In a late-night blog post, OpenAI disclosed it will wind down its collaboration with Cursor, the startup behind a leading AI coding editor that had become one of OpenAI’s top five revenue generators, projected to bring in over $1 billion on an annualized basis. The decision stems from OpenAI’s lack of confidence that SpaceX, which recently acquired Cursor in a $60 billion deal, will adhere to OpenAI’s terms of service, citing prior contract breaches by Elon Musk’s enterprises.

OpenAI declined comment, while SpaceX and Cursor did not immediately respond. Cursor’s founder Michael Truell, now leading teams at SpaceX, downplayed the loss, claiming OpenAI’s models power only about 5 percent of Cursor’s user traffic, a figure OpenAI’s core products head Thibault Sottiaux disputed and asked to be substantiated. The split follows a history of investment and near-acquisition talks between the two firms, and occurs as OpenAI, which now reports more than $40 billion in annualized revenue, readies for an IPO and expands its own Codex coding platform. Anthropic’s co-founder Tom Brown said his company will keep its Claude models available in Cursor, underscoring the broader ecosystem implications.