OpenAI Ends Cursor Partnership Over SpaceX Ties, Forgoing $1 Billion

September 3, 2026 at 09:42 PM2 min

This digest was compiled by AI from multiple sources — links to the originals are below.

OpenAI said it will wind down its partnership with AI coding startup Cursor, citing inability to trust Elon Musk's SpaceX, which acquired Cursor for $60 billion. The decision forfeits an estimated $1 billion in annualized revenue from one of OpenAI's top five customers. Cursor CEO Michael Truell disputed the impact, claiming OpenAI models serve only about 5% of Cursor user traffic.

Key Facts

OpenAI announced the decision in a late-night blog post last Friday, stating it cannot be confident SpaceX will use its technology within its terms of service.
Cursor was one of OpenAI's top five customers by revenue at the start of 2026, and OpenAI estimated Cursor would bring in more than $1 billion in annualized revenue by spring 2026.
SpaceX acquired Cursor in a $60 billion deal, and Cursor founder Michael Truell now leads teams at SpaceX.
OpenAI reportedly generates more than $40 billion in annualized revenue from subscriptions, ads in ChatGPT, and Codex access.
Cursor CEO Michael Truell claimed OpenAI models serve about 5% of Cursor user traffic, while OpenAI's Thibault Sottiaux said token usage is not a proxy for revenue or value.

Partnership Termination

OpenAI said in a late-night blog post last Friday that it would wind down its partnership with Cursor, the startup behind a popular AI coding tool. The company stated it cannot be confident that SpaceX will use its technology within its terms of service, based on its experience with Elon Musk's companies violating contracts. OpenAI declined to comment, and representatives for SpaceX and Cursor did not immediately respond to requests for comment. The company acknowledged that ending the partnership may damage its standing with developers by cutting off a major channel they use to access OpenAI's models.

Financial Impact

At the start of 2026, Cursor was one of OpenAI's top five customers in terms of revenue, according to people familiar with the matter. By spring 2026, OpenAI estimated Cursor would bring in more than $1 billion in annualized revenue based on the partnership's performance at that time. OpenAI reportedly now generates more than $40 billion in annualized revenue from subscriptions, ads in ChatGPT, and selling access to its AI coding tool Codex. Losing a major customer like Cursor may not hurt OpenAI financially as much as it once would have, but it was a difficult decision, the company acknowledged.

Public Dispute

Michael Truell, Cursor's founder and CEO who now leads teams at SpaceX, responded publicly on X hours after OpenAI's announcement. Truell claimed that OpenAI's models only serve about 5% of Cursor user traffic, implying the models were not very popular with developers using Cursor. OpenAI's head of core products, Thibault Sottiaux, pointed out that token usage is not a proxy for revenue nor value created, and asked Truell to share the math behind the 5 percent number. WIRED previously reported that Cursor leaders hoped to remain a platform for third-party AI models from OpenAI and Anthropic, even after the SpaceX acquisition.