Sam Altman and Musk’s War Costs Cursor AI After $60B Deal
SpaceX bought Cursor on August 14, and two weeks later, OpenAI is moving to cut the AI coding tool off from its models. Access ends on November 12.
Cursor is one of the most widely used coding assistants among software developers. A $60 billion all-stock deal put it inside Elon Musk's empire. OpenAI decided that was reason enough to leave.
Why OpenAI Walked Away
OpenAI never said Cursor did anything wrong. Rather, it used a change-of-control clause, meaning a contract term letting one side exit after the other is sold.
The reason it gave is trust, saying that it cannot be sure SpaceX will follow its rules. Specifically, they pointed to two events.
- X (Twitter), the platform Musk bought in 2022 and later folded into SpaceX, broke an earlier OpenAI contract.
- In a California courtroom on April 30, a lawyer asked Musk whether xAI had distilled OpenAI models to train Grok.
Distilling means prompting a rival model over and over to copy what it knows. Musk first said every AI company does it. Pressed again, he conceded that xAI partly had.
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