OpenAI won't work with Cursor anymore, says Elon Musk cannot be trusted

OpenAI is cutting off Cursor after Elon Musk's SpaceX acquired its parent company Anysphere for $60 billion. Here's why the AI giant no longer trusts Musk's companies, and how a failed MIT project became a multibillion-dollar coding startup.OpenAI plans to cut off Cursor’s access to its models. (Photo: Reuters)OpenAI has announced plans to wind down its contracts with Cursor, the AI-powered code editor, following the acquisition of its parent company, Anysphere, by SpaceX on August 14. Anysphere launched Cursor in early 2023 and has partnered with OpenAI since then. Now, in a blog post, OpenAI says the proposed shutdown date for Cursor’s access to its AI models is November 12, 2026.The reason? It has nothing to do with Cursor itself but rather with the company that now owns it. Cursor's parent company, Anysphere, was recently acquired by SpaceX for $60 billion.OpenAI says that it simply does not trust Elon Musk’s companies to follow its rules. "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 in a blog post. OpenAI cited past incidents, alleging that Musk broke contractual terms after acquiring Twitter (now X). It also referenced reports where Musk acknowledged that xAI had distilled OpenAI's data to train its own models, an action OpenAI noted directly violated its terms of service.Musk and Cursor aren't taking it quietlyNaturally, Musk didn't hold back. Responding on X, he wrote, "I couldn't care less. Scam Altman and Greg Stockman are utterly untrustworthy assholes who stole an open source nonprofit," a jab referencing OpenAI's controversial shift away from its original nonprofit roots. Cursor's own CEO, Michael Truell, took a noticeably calmer tone. "We're sorry to see that OpenAI put out a note saying they plan to block Cursor users from accessing OpenAI models in three months," he wrote on X, adding that OpenAI models only power about 5 per cent of Cursor's user traffic and that the two companies are talking to try to sort things out. Truell also noted that Cursor was one of OpenAI's earliest users and had trusted the platform as "neutral infrastructure" for its business, a trust that clearly took a hit this week.Journey of a failed MIT project to a $60 billion paydayThe bigger story here is actually how Cursor got to this point in the first place. Cursor's four founders, Michael Truell, Aman Sanger, Sualeh Asif, and Arvid Lunnemark, started their company, Anysphere, back in 2022 while still at MIT. Their original idea wasn't even Cursor. It was an AI copilot built for mechanical engineers, a bet on a less crowded market. It flopped. Rather than stubbornly trying to save a sinking idea, the founders pivoted, eventually landing on something they initially assumed was already too crowded to break into: AI-powered coding tools. That gamble turned into Cursor, an AI assistant that helps developers write, understand, and fix code, and one that grew far beyond a simple autocomplete tool as its AI agents got smarter.The growth from there was almost absurd. Anysphere was valued at around $2.6 billion in late 2024. By mid-2025, that number had jumped to nearly $10 billion, and by later that year, it hit roughly $29.3 billion, according to Forbes. By June 2026, Cursor was pulling in about $4 billion in annualised revenue.Enter SpaceX, and four new billionairesAs competition heated up from the likes of OpenAI and Anthropic building their own coding tools, Cursor needed serious computing power to keep scaling. SpaceX saw an opening. The two companies struck a partnership in April 2026 that included an option for SpaceX to acquire Anysphere outright, and just two months later, SpaceX exercised that option in a $60 billion all-stock deal. The acquisition officially closed on August 14, with Cursor saying the move gives it access to what it called the world's largest fleet of GPUs.The payoff for the founders was staggering. Forbes estimates Truell, Sanger, Asif, and Lunnemark are each now worth around $2.7 billion, and all four are still in their twenties.- EndsPublished On: Aug 30, 2026 11:55 IST