OpenAI Severs Lucrative Coding Partnership After SpaceX Takeover

OpenAI has decided to end its business relationship with Cursor, an AI coding tool recently acquired by SpaceX for $60 billion, citing trust concerns with Elon Musk's companies. The partnership had been projected to generate over $1 billion in annualized revenue for OpenAI by spring 2026, making it one of the company's top five customers. OpenAI's move reflects its effort to stabilize its business ahead of a planned public offering, even at the cost of losing a major revenue stream and potentially alienating developers.

The severed partnership represents a significant financial shift for OpenAI, which had projected Cursor would generate over $1 billion in annualized revenue by spring 2026. Cursor ranked among OpenAI's top five customers at the start of 2026, and the company's overall annualized revenue now exceeds $40 billion across subscriptions, advertising, and its Codex coding product.

The decision follows SpaceX's $60 billion acquisition of Cursor and comes as OpenAI prepares for a public offering. Cursor's founder Michael Truell publicly downplayed the impact, claiming OpenAI models serve only about 5 percent of Cursor's user traffic, though OpenAI's Thibault Sottiaux challenged that figure. OpenAI also noted Musk's xAI allegedly used its models for training earlier this year.