OpenAI to end Cursor deal with SpaceX over contract, safety concerns

OpenAI has notified SpaceX of its intention to terminate its contract to provide OpenAI models to Cursor, citing concerns over compliance with its terms of service.

The AI company said in a statement on Friday that it intends to wind down the contract by 12 November, giving SpaceX the maximum notice period permitted under the agreement.

The notice to end the contract followed Elon Musk-owned SpaceX’s acquisition of Anysphere, the developer of AI coding platform Cursor, for about $60 billion, despite OpenAI having worked with Cursor for nearly four years.

OpenAI said the decision followed concerns that SpaceX may not use its technology in accordance with its terms of service, citing what it described as previous contract violations involving companies owned by Mr Musk.

“This decision was incredibly tough, as we care deeply about our models being broadly available for developers.

“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.

Agreements

The company said its agreements with large partners typically include customised provisions designed to ensure compliance with its terms of service and safety requirements.

According to OpenAI, after Mr Musk acquired Twitter, now known as X, the social media company breached the terms of its contract with OpenAI, alongside contracts with other companies.

OpenAI also cited an admission by Mr Musk under oath earlier this year that xAI, which OpenAI said is now part of SpaceX, had violated its terms of service.

The company said its custom agreement with Cursor contains a limited period within which it can terminate the contract following a change of control.

OpenAI said the advancement of AI capabilities had also increased its responsibility to ensure that its forthcoming model, Astra, is deployed in accordance with its terms.

“As AI capabilities advance, we also have a new level of accountability to ensure our upcoming model, Astra, is being used in accordance with our terms,” the company said.

OpenAI said it had decided to allow the contract to remain in place until the latest possible termination date while withholding future models from Cursor.

It acknowledged that developers who rely on OpenAI models through Cursor would be most affected by the decision and said it was prepared to provide additional support during the transition.

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The termination will affect Cursor’s access to OpenAI models, although the coding platform also offers models from other AI companies.

Rivalry

Meanwhile, responding to the proposed contract termination, Mr Musk said he was indifferent to the decision and described OpenAI’s leadership as “untrustworthy.”

The rivalry between Mr Musk and OpenAI’s leadership dates back to 2018, when Mr Musk left the company’s board following disagreements over its direction.

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Mr Musk was a co-founder and early backer of OpenAI, which was established in 2015 as a nonprofit focused on developing artificial intelligence for the benefit of humanity.

After ChatGPT launched in November 2022, Mr Musk warned that “we are not far from dangerously strong AI.”

OpenAI launched its paid ChatGPT Plus subscription in February 2023, while the company had already established a for-profit entity in March 2019 as part of its efforts to raise capital for AI development.

In 2024, Mr Musk sued OpenAI, CEO Sam Altman, and President Greg Brockman, alleging that they had abandoned the company’s nonprofit mission by pursuing a for-profit structure.

However, a federal jury in May 2026 rejected his claims after finding that he had waited too long to bring the lawsuit; the judge subsequently accepted the jury’s decision and dismissed the claims.