In a move that’s both a business decision and a statement on trust, OpenAI has severed ties with Cursor, a leading AI coding tool, over concerns about Elon Musk's SpaceX acquisition. OpenAI’s blog post, issued in the dead of night, states that they can no longer guarantee the terms of service due to past contract violations. The decision comes as OpenAI prepares to go public and must present a stable revenue stream to investors.

The cut-off is a significant one, with Cursor being one of OpenAI’s top five customers, potentially bringing in over $1 billion in annualized revenue. It’s a gamble, as OpenAI’s primary focus is now on maintaining a good developer community, which could be damaged by this move. On the other hand, OpenAI argues that SpaceX’s control of Cursor poses a risk to its technology.

Michael Truell, now at SpaceX, pushed back, suggesting that OpenAI’s models are not widely used by Cursor’s users. However, OpenAI’s Thibault Sottiaux pointed out that token usage isn’t a direct measure of revenue or value. The partnership’s history is complex, with OpenAI’s involvement in Cursor’s early funding rounds and the companies working together on various projects over the past years.

This move could set a precedent for how companies handle partnerships with SpaceX, especially in the AI space, where data and innovation are key. But it might also strain the relationships between tech giants as they navigate the competitive landscape of AI development, all while users and developers are left wondering who they can trust.