The long-running feud between OpenAI and Elon Musk has escalated to a new level of business impact. The ChatGPT creator has announced it will pull its AI model services from the coding tool Cursor, citing an inability to trust that SpaceX will adhere to its terms of service.

On August 30, OpenAI issued a public statement explaining that, based on the track record of contract violations by Musk's companies, it had notified SpaceX of the termination, proposing to officially shut down services on November 12, the latest date permitted under the agreement.

Cursor was acquired by SpaceX in June for $60 billion, and OpenAI models currently account for roughly 5% of its traffic.

This decision stems from a prolonged public confrontation. The conflict between Musk and OpenAI CEO Sam Altman has evolved from social media spats into a federal court lawsuit. In May, a jury dismissed Musk's claims on statute of limitations grounds, but the rift between the two parties remains unhealed. Musk responded the same day by saying he "couldn't care less," while again accusing Altman and OpenAI President Greg Brockman of being "untrustworthy."

OpenAI Cites Musk's Contract Breach History

In its statement, OpenAI directly tied the decision to end the partnership to Musk's past conduct. The company said that after Musk acquired Twitter in 2022, rebranded it as X, and later merged it into SpaceX, that entity had violated OpenAI's contract terms, though the statement did not specify the details of the alleged breach. OpenAI stated:

We made this decision because, based on our experience with contract violations by Musk's companies, we cannot be confident that SpaceX will use our technology within the bounds of our terms of service.

This language effectively links a commercial contract dispute directly to years of personal animosity between the two figures, an unusually pointed tone for a tech industry partnership termination notice.

Cursor Impact Minimal as Anthropic Quickly Steps In

For Cursor, the practical impact of this development may be relatively manageable. Cursor co-founder Michael Truell said on X on August 28 that OpenAI models currently make up only about 5% of Cursor's traffic, and that the company was in communication with the OpenAI team to seek a resolution.

Meanwhile, a substitute has quickly emerged. Anthropic co-founder and Chief Computing Officer Tom Brown responded on X the same day, noting that Anthropic already has a partnership with SpaceX and would increase compute capacity to support the deployment of Claude models within Cursor.

This means that even if OpenAI follows through on the November 12 cutoff, Cursor still has a viable technical path to switch to Claude models, and the continuity of user services is unlikely to face fundamental disruption.

From Co-Founders to Courtroom Adversaries

This commercial dispute is rooted in a fractured founding relationship. Musk was a co-founder and board member of OpenAI before leaving in 2018. The tension has deepened since, eventually culminating in litigation in 2024.

In his lawsuit, Musk accused Altman and Brockman of abandoning OpenAI's original mission as an open-source charity meant to benefit humanity. He also alleged the two deceived him into donating $38 million, and criticized Microsoft's role in pushing out dissenting board members during the upheaval surrounding Altman's brief ouster and return as CEO in 2023. Musk wrote in the complaint:

The corporate structure, originally designed as a system of checks and balances between the non-profit arm, the for-profit arm, the board, and the CEO, collapsed overnight.

Altman countered in federal court in Oakland, California, arguing that Musk, after failing to gain control of OpenAI, chose to leave and founded the for-profit competitor xAI, thereby truly abandoning the original mission.

On May 18, a jury ruled against Musk, finding his claims were barred by the statute of limitations.

The fact that OpenAI has now proactively ended the Cursor partnership indicates that even with the legal battle concluded, the commercial barriers between the two companies continue to harden.