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OpenAI drops Cursor, forgoes $1 billion to avoid Elon Musk

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OpenAI drops Cursor, forgoes $1 billion to avoid Elon Musk

OpenAI said in a late-night blog post last Friday that it will wind down its partnership with Cursor, the AI coding startup that Elon Musk's SpaceX recently acquired in a $60 billion deal. OpenAI's stated reason is trust: "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," the company wrote. The decision is a large financial concession. Cursor has paid OpenAI to offer its models inside Cursor's AI coding editor, and people familiar with the matter told WIRED that at the start of 2026 Cursor was already one of OpenAI's top five customers by revenue. By spring of this year, OpenAI estimated the partnership would generate more than $1 billion in annualized revenue. OpenAI declined to comment on the figures for this story, and representatives for SpaceX and Cursor did not immediately respond to WIRED. OpenAI reportedly now generates more than $40 billion in annualized revenue overall, from subscriptions, ads in ChatGPT and its own coding tool, Codex, and is preparing to go public next year, which the article frames as a reason to present a business that leans less on Musk's goodwill. Michael Truell, Cursor's founder and CEO, who is now leading teams at SpaceX, pushed back publicly on X hours after OpenAI's post, saying OpenAI's models "serve about 5% of Cursor user traffic," a comment WIRED reads as an attempt to suggest OpenAI's models are not very popular with Cursor's developers and that losing them will not hurt the business. OpenAI's head of core products, Thibault Sottiaux, replied that token usage is "not a proxy for revenue nor value created" and asked Truell to "share the math" behind the 5 percent figure. The article ties the split to Musk's broader conflict with OpenAI. It notes that OpenAI's blog post cited an apparent admission by Musk, made during his deposition in his own lawsuit against OpenAI, that xAI, now part of SpaceX, used OpenAI's models to train its own. That lawsuit, in which Musk claimed Sam Altman and Greg Brockman had stolen a charity the three had created together roughly a decade earlier, was dismissed by a federal jury earlier this year. WIRED's Maxwell Zeff, who writes the piece as an edition of his Model Behavior newsletter, suggests OpenAI may have judged the Cursor partnership too risky to continue once Musk controlled a company that could use it to copy OpenAI's best models, though OpenAI itself did not state that mechanism directly. OpenAI and Cursor have a long history: OpenAI's startup fund was an early investor in Cursor's 2023 seed round, back when the idea of a young startup competing with Microsoft's GitHub Copilot looked unlikely. OpenAI later approached Cursor about an acquisition, though talks never advanced, and by the summer of 2025 Truell was appearing prominently in OpenAI's marketing for the launch of GPT-5. WIRED had previously reported that Cursor's leaders hoped to keep offering both OpenAI and Anthropic models even after the SpaceX acquisition, a hope some AI insiders considered unrealistic given that a Cursor-OpenAI split had looked inevitable for a while. Cursor is not losing every third-party model. Anthropic cofounder Tom Brown said Anthropic will keep making Claude available in Cursor. WIRED notes that Anthropic itself depends on Musk's SpaceX for $45 billion of data center capacity, and contrasts this with Anthropic's earlier conduct: last year it cut off the coding startup Windsurf when OpenAI was rumored to be acquiring it (Windsurf was ultimately bought by a different company, Cognition). Anthropic cofounder Jared Kaplan had told WIRED at the time, "It would be odd for us to sell Claude to OpenAI."

Key facts

  • OpenAI is winding down its partnership with Cursor after Elon Musk's SpaceX bought the coding startup for $60 billion, citing distrust that SpaceX will keep to OpenAI's terms of service.
  • OpenAI estimated by spring of this year that the Cursor partnership would bring in more than $1 billion in annualized revenue, and Cursor was one of OpenAI's top five customers by revenue at the start of 2026.
  • Cursor CEO Michael Truell, now leading teams at SpaceX, said OpenAI's models serve only about 5% of Cursor's user traffic; OpenAI's Thibault Sottiaux disputed that this reflects revenue or value and asked Truell to show his math.
  • OpenAI's blog post cited Musk's own deposition testimony, in his now-dismissed lawsuit against OpenAI, that xAI used OpenAI's models to train its own, as part of the trust problem.
  • Anthropic will keep Claude available in Cursor even though it relies on Musk's SpaceX for $45 billion of data center capacity, a contrast with its decision last year to cut off Windsurf when OpenAI was rumored to be acquiring it.

Why it matters

OpenAI is walking away from an estimated $1 billion-plus in annual revenue rather than keep serving a company Elon Musk controls. That is a rare case of a major AI lab choosing trust over money, and it signals how far the OpenAI-Musk rivalry has escalated since SpaceX's $60 billion acquisition of Cursor. It also matters for OpenAI's upcoming IPO: the company is reportedly trying to show investors a business that does not depend on Musk's goodwill, and cutting Cursor loose removes one of the largest points of exposure to him.

Who it affects

Cursor's developers, who will lose direct access to OpenAI's models through the editor as the partnership winds down; OpenAI, which loses a top-five customer by revenue; Cursor and its founder Michael Truell, who now leads teams at SpaceX; and Anthropic, which is staying in Cursor as a model supplier while itself depending on SpaceX for $45 billion of data center capacity.

How to use it

Developers who use Cursor with OpenAI's models should expect that access to wind down over time rather than end abruptly overnight, though OpenAI's blog post gives no specific timeline. Claude remains available in Cursor, per Anthropic cofounder Tom Brown, so teams that want to keep working inside Cursor without depending on OpenAI's models have that option.

How solid is it

The reporting comes from WIRED, drawing on OpenAI's own blog post, on-the-record public statements from Truell and OpenAI's Thibault Sottiaux, and past on-the-record comments from Anthropic's Jared Kaplan. The revenue figures, including the more-than-$1-billion estimate and Cursor's rank among OpenAI's top five customers, are attributed to unnamed people familiar with the matter; OpenAI declined to comment on them, and SpaceX and Cursor did not respond to WIRED's requests for comment by publication.

Risks and caveats

The financial figures rest on anonymous sourcing that OpenAI has not confirmed. Truell's claim that OpenAI's models serve only about 5% of Cursor's traffic is disputed by OpenAI and unverified either way, since Sottiaux's rebuttal offers no counter-figure. The suggestion that OpenAI feared SpaceX could distill its models is the article's own inference, not something OpenAI stated directly, and the source does not disclose OpenAI's current financial stake, if any, in Cursor beyond its 2023 seed investment.

“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, in its blog post