OpenAI to cut off AI models for Cursor - iTnews

Home News Technology Software OpenAI to cut off AI models for Cursor By Anusha Shah and Shubham Kalia Aug 31 2026 6:18AM Following its acquisition by SpaceX. Key points OpenAI plans to stop providing AI models to Cursor after SpaceX completed its US$60 billion acquisition of Anysphere, the startup behind Cursor. OpenAI cited concerns that SpaceX would not use its technology within its terms of service, citing past contract violations by Musk's companies. Musk dismissed the move, calling Altman and Greg Brockman untrustworthy, while Cursor co-founder Michael Truell said the company was in talks with OpenAI to resolve the issue. OpenAI said it ⁠plans to ⁠stop providing AI models to Cursor, the coding-tool company now owned by Elon Musk's SpaceX, marking a further escalation in the bitter rivalry between OpenAI CEO Sam Altman and Musk. Musk and Altman have been at odds ‌for years, a feud that culminated earlier this year ‌in ‌a trial over Musk's US$150 billion ($210 billion) lawsuit against OpenAI. During ‌the trial, Musk's lawyer said that Musk and other ⁠witnesses had testified that Altman was a liar, while OpenAI argued that Musk had sought control of the company. "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 in a blog post. Musk responded early on Saturday ⁠in an X post, writing, "I couldn't care less." He accused Altman and OpenAI President Greg Brockman of being "untrustworthy," while repeating his assertion that they "stole an open source nonprofit." Musk, the world's richest person, had sued OpenAI and Altman for "stealing a charity" by betraying the company's original nonprofit mission for their own enrichment. A US federal jury ruled against Musk earlier this year, finding that he had filed the case too late. However, Michael Truell, a co-founder of Cursor and now an ​executive at SpaceX, said on X that the ⁠company was speaking with the OpenAI team to resolve this ⁠issue. Hours after OpenAI's announcement, Anthropic, which rivals both firms but has an ongoing partnership with SpaceX, said ​it planned to increase compute to support Claude models in Cursor, according to ‌Tom Brown, one ⁠of the co-founders of the firm. In its blog post, OpenAI said that X, formerly known as Twitter and now part of SpaceX, had breached the terms of its contract with OpenAI after Musk ‌acquired the platform. "To work with a large partner like SpaceX, we typically rely on custom contracts to ensure compliance with our terms of service and that the integration provides for safety at scale," the AI company added. The ChatGPT-maker said ​it proposed a shutoff date of November 12, 2026, adding that its agreement with Cursor gave it a limited time window to cancel the contract following "a change of control." SpaceX announced a deal ‌to buy Anysphere, ⁠the startup behind Cursor, for US$60 billion ​in an all-stock deal in June, and completed the acquisition earlier this month. Add iTnews as your trusted source Got a news tip for our journalists? Share it with us anonymously here . © 2019 Thomson Reuters. Click for Restrictions. Tags: ai coding cursor openai software Partner Content State of Security 2026: Data Security State of Security 2026: Application Security Partner Content Scaling innovation safely: innovating through rapid prototyping with the mission in mind Promoted Content AI agents are becoming the enterprise's most privileged users. And most organisations don't know it yet SPONSORED RESOURCES ITIL® AI Governance 2026 Wasabi Global Cloud Storage Index The Mythos Moment: When AI Outpaces Remediation - How Can Enterprises Respond Innovate anywhere with HPE and Azure Local Cloud Covered Report: New Zealand Events Integrate 2026 Security Exhibition & Conference NiCE World APAC 2026 iTnews State of Security Breakfast Melbourne NiCE World APAC 2026