I may be a rare Cursor user around here, but I am saddened by this news. The thing that keeps me using it is precisely the ability to switch between models: I usually do brainstorm/planning with Sol or Terra, then let Composer (free) deal with the implementation. For certain tasks I use Claude, which tends to be more expensive but sometimes saves me time.
Using both OpenAI and Anthropic models, Cursor is cheaper than having two separate subscriptions, and their free tier of Composer is good enough. I will now have to reconsider my options.
Your link doesn't suggest a violation of TOS, but rather a policy shift disallowing their major competitors to use their model for any use.
That thread you linked suggested they were using it with cursor as part of their development process, not for distilling.
>"Hi team, I believe many of you have already discovered that anthropic models are not responding on cursor. According to cursor this is a new policy anthropic is enforcing for all its major competitors."
i'll be surprised if anthropic doesnt follow. cursors biggest advantage has been giving users a polished wrapper around whichever frontier model they prefer
what's the moat for AI labs like OpenAI and Antrhopic as they seek trillion IPOs. a lot of people said Chinese models also distill US LLM models. if it is this easy to do. how do US AI labs justify asking for trillion?
It's always been clear to me that Cursor's business model of reselling others' APIs had its days numbered. Not necessarily because the providers would pull the plug, but because you wouldn't be able to compete with subsidized plans.
Cursor is already kind of useless for third party models unless you're willing to spend thousands of dollars. It's only worth it if you're going to use mostly grok/composer.
If the Opus/Fable harness is superior and it's written using Opus/Fable then it will cease to be a moat. Otherwise the premise for coding using LLMs is essentially untrue.
On one hand, yes, it doesn't make sense to give out subsidized tokens forever.
On the other hand, subscriptions create lock-in in a way that API pricing doesn't.
I think a more likely end is that subscription value decreases over time because API pricing gets more reasonable, but subscriptions stay because they are a good way of getting money out of people consistently.
Right, subscriptions are not only cheaper because they "create lock-in". They also let you do things like forecast demand and plan your capacity for it, borrow against it sometimes if you need to, and keep somewhat less around because your cashflows are predictable. It is also valuable because it keeps customers around but that's by no means the only reason recurring revenue gets a higher multiple.
This is why "subsidized tokens" is possibly a misnomer. Money at lower variance is worth more than the same money at higher variance. Not "subsidy" so much as reducing risk and passing some of that to a consumer.
What do you mean by that? If you're being sassy about a downvote then I'll remind you that when you reply to a comment, that person can't downvote your reply.
While this isn't great for users it seems like a pretty standard circling of the wagons in preparation for the next phase in the battle for frontier AI dominance.
Ironically, as a Cursor and Claude subscriber, but not an OpenAI subscriber, this will push me back to Anthropic. I don't feel good about giving OpenAI money directly, but I've found switching to GPT 5.6 Sol now and again in Cursor to be useful. Now I'll probably just forget about OpenAI models.
Yeah I haven’t had a problem yet which was too difficult for Fable to solve. I do have problems which Sol does not do well on. But if I could get Fable-level intelligence faster/cheaper and less restricted, that’s all I need.
Fable is great minus it's annoying writing style. It's nowhere near as bad as Opus 5 but it's very "AI trope-y" even with heavy steering. I can spot the writing immediately.
Yeah not sure why everyone thinks they need a PhD lvl assitant to build their slop SaaS when an open source model that is 100x cheaper, and 3x faster and arguably still "PhD" level assitant could also build their slop SaaS.
Exactly. Astra will likely get its Mythos moment, and then another Chinese lab releases its equivalent three months later while Anthropic releases a newer, better model.
There's a reason why most businesses don't hire PhDs, they dont need it. PhDs are cheap in many countries, arguably more affordable than a full time mythos lvl agent, yet businesses in India still don't hire 30k a year PhDs to run their businesses. Its simply not necessary. AI labs have lost the plot from a business perspective. If chasing ASI is the goal, that also seems stupid.. Putting all of your customers out of business with ASI doesn't really lead to great outcomes either.
I don't see how it makes sense to use models outside of Grok or Composer in cursor unless you like the tooling to such degree that you're willing to pay out the nose for access to OpenAI and Anthropic to use with that tooling. And Codex is regularly scoring towards the top among harnesses, so you might as well use the best harness available for the given model. I'm happy with Grok and Composer in Cursor. If Cursor wants to add more models, they should host more open models.
The reason it makes sense is because different models are better at different things. Allowing yourself to be locked in to a particular model by these companies is a bad idea and will lead to worse outcomes for yourself and the market as a whole.
I can’t speak to the veracity of the benchmarks but it appears their methodology is sound. Nanobot has 47k stars, fwiw https://github.com/HKUDS/nanobot
It has been more of an OpenClaw or Hermes alternative than a coding agent like OpenCode or Pi, so it’s likely to do well given less context bloat.
If you have such a world changing technology, why sell an API when you can capture all the value yourself? That's what every provider is asking themselves.
Cursor will be fine after this, as they have their own first party models and can potentially use open weight models via API or their own hardware, which have gotten good enough to Opus and Fable quality now for many use cases.
Being a pure play model provider is completely untenable right now. Coding agents own your demand; Nvidia, data centers, and DRAM manufacturers own your supply. You're getting squeezed by open weight models. Your only bet to making money off this thing is by locking your model down to your program to have some semblance of a moat. The fact that businesses can change providers with just the change of an API key is unsustainable. You have neither the "hard to switch" lock-in of a traditional software company nor do you have the near-zero marginal cost of production they have. Each token of inference costs you money, not to mention the training costs. At least locking the models down to your harness lets you get some sort of lock-in.
Everyone is playing hardball. No one wants to be IBM in an IBM-Microsoft dance.
But this is kind of like banning GPU exports to China. It will encourage them to develop their own technology. Yes, it will take them longer, but in the long-run China will be more successful with their own GPU tech.
> As AI capabilities advance, we also have a new level of accountability to ensure our upcoming model, Astra, is being used in accordance with our terms.
I think Sam Altman has played a clever business move here, they can use this excuse immediately after the Hugging Face leaks and it's not going to be dismissed willy-nilly. Whereas long term they probably wanted to end their partnership with Cursor anyway. I bet Dario will be happy about this too, but maybe the compute deal prevents him from doing similar anytime soon.
Is it really an excuse? As the release points out, musk admitted under oath to distilling OpenAI’s models to produce xai models on an ongoing basis. Whatever you think about goose for the gander wrt IP theft, I wouldn’t voluntarily do business with a competitor who was actively and brazenly flouting my terms, would you?
> As AI capabilities advance, we also have a new level of accountability to ensure our upcoming model, Astra, is being used in accordance with our terms.
This move seems to protect Astra against distillation. I wonder whether Astra will be released before or after 11/12.
My guess is that OpenAI now has a full blown Cursor equivalent in development (an expansion of Codex?) and will announce it in September. Otherwise it stands to lose those who are used to working with Cursor.
Yeah, the "go above and beyond for our users" implies they have a "better" version of Cursor coming. Probably integrating their new chip/microphone based product.
> We know that the people most affected by this decision are the developers who rely on OpenAI models in Cursor. We care about their experience in this transition and we’re ready to go above and beyond to support them.
It was honestly just a matter of time, given all of the bad blood there is between Sam and Elon and Elon basically admitting under oath they were distilling other companies models.
I wonder if Anthropic will follow suit given their campaign against distillation or if they'll stay quiet given their reliance on SpaceX (among others) for hardware.
Honestly, can't say I miss my Cursor subscription at all, and I'm surprised they're still a going concern. Why would I want to use a proprietary VSCode fork with an identity crisis when I can use literally any editor with any agent and have about the same experience?
Not surprised, but honestly I don't feel like this is a huge loss for cursor. Models are so commoditized, and 99% of users don't need particularly fancy models. Between existing anthropic models, composer-2, honestly even grok models, and also the fact that many people just use 'auto' mode, I feel like many won't feel the impact for OpenAI's withdrawal.
Maybe if Claude joined along it would be more impactful. For better or worse though, Xai seems like its lining themselves up to handle being on their own for cursor.
Spend a lot of time thinking about why individuals shouldn't trust large AI cos, now it's interesting getting to think about how the AI companies themselves don't trust each other. Capitalism is viciously cold and uncaring.
I used cursor extensively both at work and for personal use. Its harness is pretty darn good but I basically never used OpenAI models in it.
The first party cursor models (initially composer and now grok-cursor) and price very competitively for their quality and have very generous usage limits included in the base plans, and then per token pricing afterwards.
Occasionally I’ve used some of the Anthropic models in it but found their cost massively outweighed the benefits for the type of usage we do.
I was using Sonnet 4.5 and 4.6 for a while but the newer models are a lot more expensive at the per-token pricing.
Cursor does currently allow users to BYO OpenAI token. Given Cursor won't have access to OpenAI models for prompt engineering/evals though, there's definitely a question of whether they'd allow picking any new OpenAI models, assuming the BYOK option continues to exist at all.
> 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.
> After Musk acquired Twitter, now part of SpaceX, the company broke (opens in a new window) the terms of our contract (alongside many others).
I have never seen one large company throw another large company under the bus without any legalese filters like this before. Wondering if OpenAI site got pwned. Or maybe we in some strange, alternative reality. I doubt even their LLMs would be this frank.
The way I read the article was that they will continue providing their current models, but won't let them use any newer ones announced even between now and the end date. But I might be wrong.
> we’ve decided to hold the contract cancellation to the latest date we can while not providing future models to Cursor.
All good points. However, it's not a safe assumption that everyone operates that way. People probably use the flagship models because that's what they know. Sure, some probably just use the default, in this case Grok.
Also, it's a signal more than anything. OpenAI pulls out of Cursor. Then Anthropic and Google does as well. Then you no longer have "Cursor" you have Grok.
Grok doesn't have the best reputation in general, regardless if you're tech savvy or not.
Cursor is like one of the least economical ways to use Claude and OpenAI, virtually nobody does it. You use Cursor for their autocomplete/composer + grok. For using Claude and Codex, you get immeasurably more bang for your buck just using them directly.
i don't see the point of cursor when vsc + codex extension does the same thing. i don't use autocomplete anymore (who writes code anymore? lol) any and anyone using grok unironically is also probably a moron.
i only tell VC type people or others from whom i want something "oh yeah grok is cool" if they mention it, because they're always sucking off Elon
this is a pretty clean test of whether people were buying cursor or just using it for convenient access to whichever model was flavor of the week.
i work in qa so i'm naturally wary of adding another critical dependency to a development workflow, if the model you actually want can just disappear because two vendor change ownership or start argueing then the wrapper has to be really good on its own.
cursors harness and its own models may be good enough that users stay, and if they do cursor has a moat at least. if everyone follows the openai models out the door, it will just become a polished ui.
Using both OpenAI and Anthropic models, Cursor is cheaper than having two separate subscriptions, and their free tier of Composer is good enough. I will now have to reconsider my options.
So this is OpenAI following suit after Musk admitted to distilling their models.
This was bound to happen once Cursor decided to sell itself to a competing model provider.
It'll be interesting to see if Anthropic applies their ban to Cursor, or if that datacenter deal they signed with Musk changes anything.
That thread you linked suggested they were using it with cursor as part of their development process, not for distilling.
>"Hi team, I believe many of you have already discovered that anthropic models are not responding on cursor. According to cursor this is a new policy anthropic is enforcing for all its major competitors."
And a month before the OpenAI block, they blocked Windsurf for the same reason: https://www.forbes.com/sites/johanmoreno/2025/06/05/anthropi...
So its pretty clear the TOS had this clause prior to Jan 2026.
It's hard to imagine a 1B / month deal wouldn't.
what's the moat for AI labs like OpenAI and Antrhopic as they seek trillion IPOs. a lot of people said Chinese models also distill US LLM models. if it is this easy to do. how do US AI labs justify asking for trillion?
Otherwise, it will be competitors distilling, and the government getting upset.
It's hard for me to see a different future.
Cursor is already kind of useless for third party models unless you're willing to spend thousands of dollars. It's only worth it if you're going to use mostly grok/composer.
Honestly, _this_ was their moat more than Composer to me.
I dont know how cursor works. Everytime ive tried to use, its super buggy and has memory leaks that make my very quite PC sound like a jet engine.
Shit, for most things, ive got a dev agent that reads change requests from a GDoc and communicates through email with me. I can develop in my mobile
Big reason we built https://boxes.dev around the model harnesses (Codex + Claude Code), so you can bring your own subscriptions.
On the other hand, subscriptions create lock-in in a way that API pricing doesn't.
I think a more likely end is that subscription value decreases over time because API pricing gets more reasonable, but subscriptions stay because they are a good way of getting money out of people consistently.
This is why "subsidized tokens" is possibly a misnomer. Money at lower variance is worth more than the same money at higher variance. Not "subsidy" so much as reducing risk and passing some of that to a consumer.
How long have you been in tech, outta curiosity?
Edit: great answer.
What do you mean by that? If you're being sassy about a downvote then I'll remind you that when you reply to a comment, that person can't downvote your reply.
Ironically, as a Cursor and Claude subscriber, but not an OpenAI subscriber, this will push me back to Anthropic. I don't feel good about giving OpenAI money directly, but I've found switching to GPT 5.6 Sol now and again in Cursor to be useful. Now I'll probably just forget about OpenAI models.
They're commodity fetishism maxxing.
This provides a method, but the data looks stale and perhaps a bit thin compared to say, Cursor, or even AntiGravity data.
It has been more of an OpenClaw or Hermes alternative than a coding agent like OpenCode or Pi, so it’s likely to do well given less context bloat.
Cursor will be fine after this, as they have their own first party models and can potentially use open weight models via API or their own hardware, which have gotten good enough to Opus and Fable quality now for many use cases.
But this is kind of like banning GPU exports to China. It will encourage them to develop their own technology. Yes, it will take them longer, but in the long-run China will be more successful with their own GPU tech.
The same could be true of SpaceX/xAI
You had me until:
>The same could be true of a company run by a drug addict.
Elon Musk is nowhere near as capable as millions of intelligent developers in China.
Burn.
I think Sam Altman has played a clever business move here, they can use this excuse immediately after the Hugging Face leaks and it's not going to be dismissed willy-nilly. Whereas long term they probably wanted to end their partnership with Cursor anyway. I bet Dario will be happy about this too, but maybe the compute deal prevents him from doing similar anytime soon.
Very interesting times we live in...
This move seems to protect Astra against distillation. I wonder whether Astra will be released before or after 11/12.
Do I smell a cursor-analogue from openAI?
I wonder if Anthropic will follow suit given their campaign against distillation or if they'll stay quiet given their reliance on SpaceX (among others) for hardware.
Maybe if Claude joined along it would be more impactful. For better or worse though, Xai seems like its lining themselves up to handle being on their own for cursor.
Is there a way to work around this (like using your OpenAI limits directly?)
The first party cursor models (initially composer and now grok-cursor) and price very competitively for their quality and have very generous usage limits included in the base plans, and then per token pricing afterwards.
Occasionally I’ve used some of the Anthropic models in it but found their cost massively outweighed the benefits for the type of usage we do.
I was using Sonnet 4.5 and 4.6 for a while but the newer models are a lot more expensive at the per-token pricing.
> After Musk acquired Twitter, now part of SpaceX, the company broke (opens in a new window) the terms of our contract (alongside many others).
I have never seen one large company throw another large company under the bus without any legalese filters like this before. Wondering if OpenAI site got pwned. Or maybe we in some strange, alternative reality. I doubt even their LLMs would be this frank.
https://www.theverge.com/ai-artificial-intelligence/921546/e...
> we’ve decided to hold the contract cancellation to the latest date we can while not providing future models to Cursor.
It's gunna to happen anyway.
We are sailing into the age of vertically integrated intelligence.
https://news.ycombinator.com/item?id=49428835
If Claude pulls away from Cursor as well then Cursor is basically done.
I'm not a fan of Elon, nor do I use Cursor, but OpenAI and Anthropic aren't the only models.
Also, it's a signal more than anything. OpenAI pulls out of Cursor. Then Anthropic and Google does as well. Then you no longer have "Cursor" you have Grok.
Grok doesn't have the best reputation in general, regardless if you're tech savvy or not.
i only tell VC type people or others from whom i want something "oh yeah grok is cool" if they mention it, because they're always sucking off Elon
Seriously though, when the api providers start blacklisting cursor and they’re forced to swap to open weight models…
If that happens, what even is the difference between openrouter and cursor?
Strategically, OpenAI long-term will want to own the direct relationship with all their customers. As will most major AI labs.
https://cursor.com/docs/models-and-pricing
i work in qa so i'm naturally wary of adding another critical dependency to a development workflow, if the model you actually want can just disappear because two vendor change ownership or start argueing then the wrapper has to be really good on its own.
cursors harness and its own models may be good enough that users stay, and if they do cursor has a moat at least. if everyone follows the openai models out the door, it will just become a polished ui.