OpenAI Severed Ties with a Billion-Dollar Client to Steer Clear of Elon Musk

In a late-night blog post last Friday, OpenAI announced it would be ending its partnership with Cursor, the startup known for one of the leading AI coding tools available. The main reason for OpenAI’s decision seems to be a lack of trust in Elon Musk, whose company SpaceX has recently acquired Cursor in a deal valued at $60 billion.

This move means OpenAI is stepping away from one of its key customers. Cursor has historically paid OpenAI to provide developers with the ChatGPT creator’s models through its AI coding editor. By the start of 2026, Cursor was identified as one of OpenAI’s top five customers in revenue, according to insiders who spoke with WIRED. By the spring of this year, OpenAI projected that Cursor could generate over $1 billion in annual revenue for the ChatGPT maker, based on the partnership’s previous performance, the insiders noted.

These insights, previously unreported, highlight the financial toll OpenAI is prepared to endure to sever ties with Musk. OpenAI has opted not to comment, while representatives for SpaceX and Cursor had yet to respond to WIRED’s inquiry.

“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 stated in its blog post.

As OpenAI gears up for a public offering next year, it aims to present a more stable business model—ideally one less dependent on Musk’s affiliations. Reports indicate that OpenAI now earns over $40 billion in annual revenue, sourced from multiple business avenues, including subscriptions, advertisements within ChatGPT, and selling access to its AI coding tool, Codex.

While losing a key customer like Cursor may not significantly impact OpenAI’s finances as it once would have, the decision was still a challenging one. The company acknowledged in its blog post that terminating this partnership may negatively affect its relationship with developers—a group it has invested years in cultivating—by removing a major access point to OpenAI’s models.

Michael Truell, Cursor’s founder and CEO, who is now leading teams at SpaceX, responded publicly to OpenAI’s announcement shortly after on Friday through a post on X, asserting that the ChatGPT-maker’s models account for only “about 5% of Cursor user traffic.” This remark seemed intended to suggest that OpenAI’s models lacked popularity with Cursor’s developers and wouldn’t significantly impact its operations.

OpenAI’s head of core products, Thibault Sottiaux, quickly clarified that token usage is “not a proxy for revenue nor value created,” and challenged Truell to “share the math” behind the 5 percent figure.

WIRED previously reported that Cursor’s leaders expressed hopes of continuing to serve as a platform for third-party AI models from both OpenAI and Anthropic, despite the SpaceX acquisition. Many insiders within the AI community viewed this as optimistic, presuming that the split between Cursor and OpenAI had long been inevitable. As OpenAI expands Codex into a significant AI coding enterprise, it finds itself continuously competing with Cursor for clientele. Nonetheless, the two companies had managed to coexist relatively harmoniously as both partners and competitors for over a year.

Clearly, that collaboration was no longer viable with Musk at the helm of Cursor. OpenAI may have concluded that its partnership with Cursor posed too great a risk, considering the potential for SpaceX to utilize its most advanced AI models. The company highlighted in its blog post that earlier this year, Musk seemingly indicated that xAI—now part of SpaceX—had used OpenAI’s models for its own training purposes. This acknowledgment came during Musk’s deposition in his lawsuit against OpenAI, where he claimed that Sam Altman and Greg Brockman had appropriated a charity they founded together nearly a decade ago. A federal jury dismissed the case earlier this year.