OpenAI Cuts Off Cursor’s AI Model Access, Deepening Musk-Altman Rivalry

OpenAI announced it will stop providing its AI models to Cursor, the coding tool recently acquired by SpaceX in a $60 billion deal. The company said it plans to shut off access by November 12, 2026, citing concerns that SpaceX would not follow OpenAI’s usage terms based on past experiences with Elon Musk’s companies.

OpenAI Points to Past Contract Violations

OpenAI referenced previous instances involving Musk’s companies allegedly breaking contract terms, including testimony related to another Musk owned AI company violating similar usage policies. The decision marks the latest development in the ongoing tension between Musk and OpenAI CEO Sam Altman, following an earlier lawsuit Musk filed against OpenAI that was ultimately dismissed on procedural grounds.

Impact on Cursor’s Developer Community

The move affects Cursor’s ability to offer OpenAI’s models, including its upcoming advanced model, to developers using the platform. Cursor’s co-founder said discussions between the two companies are ongoing in an effort to resolve the issue, noting that a relatively small share of Cursor’s overall usage relies on OpenAI’s models.

SpaceX Stock Remains Resilient

Despite the news, SpaceX shares traded higher, reflecting continued investor confidence in the company’s broader business outlook. SpaceX has previously highlighted artificial intelligence as a major long-term growth opportunity, projecting substantial future value tied to AI-related ventures.

SpaceX also faced a delay in its upcoming crewed mission to the International Space Station after engineers detected an issue in the spacecraft’s propulsion system. NASA and SpaceX said additional testing is required before a new launch date can be set, pushing back the mission from its original September target.