OpenAI to cut off AI models for SpaceX-owned Cursor, escalating feud with Musk

By Anusha Shah and Shubham Kalia

Aug 28 (Reuters) - OpenAI said on Friday that 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 $150 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 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 $60 billion in an all-stock deal in June, and completed the acquisition earlier this month.

(Reporting by Anusha Shah and Shubham Kalia in Bengaluru; Editing by William Mallard and Ros Russell)