OpenAI cuts off Cursor after SpaceX deal

OpenAI said on August 28 that it will wind down its contract supplying models to Cursor, with a proposed shutoff date of November 12. The move follows SpaceX’s $60 billion all-stock acquisition of the AI coding startup, which closed on August 14. Cursor has built much of its coding-agent product on a mix of models, including OpenAI’s, alongside its own harness.

OpenAI’s stated reason is not about Cursor’s product but about who now owns it. The company pointed to Elon Musk’s track record with prior deals: after Musk acquired Twitter, the company broke the terms of its OpenAI contract, and Musk admitted under oath earlier this year that xAI, now also under the SpaceX umbrella, had violated OpenAI’s terms of service. OpenAI is treating the Cursor acquisition as bringing a known bad actor into its customer relationship, not as a dispute with Cursor itself.

What it means for Cursor customers

Cursor has about seven weeks to secure alternative model access for any workflows that route through OpenAI, most likely leaning harder on Anthropic, Google, or its own in-house models. For developers who chose Cursor specifically for OpenAI model access, this is a forcing function to check which model actually handles a given task inside the Cursor Router before the cutoff, since routed requests may silently fail or fall back once OpenAI access ends. It is also a reminder that a tool’s model roster is a function of who owns the company, not just what the product page advertises, worth checking again the next time a vendor you depend on changes hands.