OpenAI has announced plans to end its contracts with Cursor, the AI-powered coding editor, after its parent company Anysphere was acquired by SpaceX on August 14. Anysphere launched Cursor in early 2023 and has worked with OpenAI since then. According to a blog post from OpenAI, Cursor is expected to lose access to its AI models on November 12, 2026.
OpenAI said the decision was not related to Cursor itself but to its new ownership. Anysphere was recently acquired by SpaceX in a $60 billion deal.
The company said it could no longer be confident that SpaceX would use its technology in accordance with OpenAI’s terms of service. “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.
OpenAI pointed to previous disputes involving Elon Musk’s companies, including allegations that Musk violated contractual obligations after acquiring Twitter, now X. It also referred to reports that Musk had acknowledged xAI using distilled OpenAI data to train its own models, which OpenAI said was prohibited under its terms.
MUSK AND CURSOR RESPOND
Musk responded angrily on X, dismissing the decision and accusing OpenAI CEO Sam Altman and Greg Brockman of being untrustworthy. He also criticised OpenAI’s move away from its original nonprofit structure.
Cursor CEO Michael Truell adopted a more measured tone. He said the company was disappointed by OpenAI’s announcement that it intended to block Cursor users from accessing OpenAI models within three months.
Truell said OpenAI models account for only about 5 per cent of Cursor’s user traffic and added that the two companies were in discussions to resolve the issue. He also pointed out that Cursor had been among OpenAI’s earliest customers and had relied on the company as neutral infrastructure, suggesting that the latest development had affected that relationship.
FROM FAILED MIT IDEA TO $60 BILLION ACQUISITION
The dispute comes against the backdrop of Cursor’s extraordinary rise.
Anysphere was founded in 2022 by four MIT students — Michael Truell, Aman Sanger, Sualeh Asif and Arvid Lunnemark. Their initial product was an AI copilot designed for mechanical engineers, targeting a market they believed was less competitive. The idea failed.
The founders eventually changed direction and entered the increasingly crowded AI coding market. That pivot produced Cursor, an AI coding assistant capable of helping developers write, understand and debug software. As its AI agents became more sophisticated, the product evolved well beyond a conventional autocomplete tool.
The company’s valuation grew rapidly. Anysphere was valued at roughly $2.6 billion in late 2024, before approaching $10 billion by the middle of 2025. Later that year, its valuation reached around $29.3 billion, according to Forbes. By June 2026, Cursor was generating approximately $4 billion in annualised revenue.
SPACEX ACQUISITION CREATES FOUR YOUNG BILLIONAIRES
As OpenAI and Anthropic intensified competition in AI coding tools, Cursor required substantial computing resources to continue expanding.
SpaceX and Anysphere entered into a partnership in April 2026 that included an option for SpaceX to acquire the company. Two months later, SpaceX exercised that option through a $60 billion all-stock transaction.
The acquisition was completed on August 14. Cursor said the deal would provide it with access to what it described as the world’s largest GPU fleet.
The acquisition also transformed the fortunes of Anysphere’s founders. Forbes estimates that Truell, Sanger, Asif and Lunnemark are each now worth around $2.7 billion, despite all four still being in their twenties.
