What is Cursor

What it is

Cursor is an AI-first code editor and development environment. It is a fork of Visual Studio Code's open-source codebase with AI features built directly into the editor rather than added as a plugin: tab completion that suggests multi-line changes, and an agent mode that can search a codebase, edit files, and run terminal commands from a natural-language request.

The company behind it is Anysphere, founded in 2022 by MIT students Michael Truell, Sualeh Asif, Aman Sanger, and Arvid Lunnemark. The product launched in 2023. Anysphere raised an $8 million seed round in October 2023 led by the OpenAI Startup Fund, and a $900 million Series C in June 2025 that valued the company at $9.9 billion. In August 2026, SpaceX acquired Anysphere in an all-stock deal reported to value it at $60 billion, with Cursor continuing as a wholly owned subsidiary integrated into SpaceX's AI efforts.

How it works

Because Cursor forks VS Code instead of extending it, the team controls the editor's rendering pipeline, file-system hooks, and extension host. That control enables things the VS Code extension API cannot easily provide: multi-file diff overlays, shadow workspaces where the agent works without touching your files until you approve, and agent execution woven into editing. The tradeoff is ongoing merge overhead with upstream VS Code; every VS Code release has to be integrated.

The agent mode takes a request in plain language, plans the steps, searches the codebase, makes edits, and runs commands, showing its work as it goes. Background agents can run in the cloud, launched from the web app or Slack, with progress tracked through shareable links. Cursor 2.0, released in October 2025, added support for running multiple agents in parallel using git worktrees, plus the company's first coding model, Composer. A second-generation Composer 2 arrived in March 2026.

The editor supports the Model Context Protocol with one-click installs, offers a privacy mode that avoids storing code, and connects to models from several providers alongside its own Composer models. Per Wikipedia citing The Verge, the available models have included offerings from Grok, Claude, and Google DeepMind. The company also acquired Supermaven in November 2024 and Graphite in December 2025, absorbing both talent and technology. Side products include Bugbot, a GitHub pull-request review tool launched in July 2025.

Key details

Cursor's free tier covers the basics, with background agents excluded. Paid plans reported in 2026 were Pro at $20 per month, Business at $40, and Ultra at $200, the last launched in June 2025 with twenty times the usage of Pro plus priority feature access. Since July 2025, Pro moved from a fixed count of included requests to a usage-metered cap, a change that proved controversial. Team pricing was reported at $40 per seat standard and $120 for a premium seat with five times the usage. Pricing changes often, so verify current tiers.

Limitations

Cursor's history includes some public stumbles. The July 2025 switch to usage-metered billing provoked complaints about unexpected charges; the company apologized, rolled back the limits, and promised refunds. In April 2025, its AI support agent invented a non-existent login policy, which triggered a wave of cancellations before refunds were issued. Users and reviewers have also reported bugs, frequent interface changes, and high subscription costs.

A separate scrutiny episode concerned Composer 2, released in March 2026: users discovered it was built on top of Moonshot AI's open-weights Kimi 2.5, something Cursor had not disclosed at launch, and a company executive later acknowledged it after the discovery spread. For teams evaluating the editor, the pattern is consistent: fast-moving features, occasionally ahead of the communication about them. The SpaceX acquisition adds a new variable; how a rocket company's ownership shapes a developer tool's roadmap remains to be seen.

Under new ownership

The SpaceX acquisition in August 2026, reported at a $60 billion valuation, was one of the stranger deals in tech history: a rocket company buying a code editor. The stated logic was talent and AI capability; SpaceX was building its AI efforts and wanted one of the best applied teams in the field. Cursor continues as a wholly owned subsidiary, which preserves the product while changing the incentives behind it.

For users, the practical questions are about roadmap and independence. Anysphere's pace came from startup urgency and venture funding; a subsidiary of a private space company operates under different pressures. The early signs were continuity, but acquisitions reshape priorities slowly, and the developer community is watching for any drift toward internal tooling over the public product.

The competitive field did not stand still. GitHub Copilot kept expanding its agent capabilities, Windsurf pushed the agentic editor concept from a different direction, and the major labs shipped coding models that narrowed Cursor's model advantage. Composer, Cursor's own model line, was the strategic response: owning the model as well as the editor. The undisclosed Kimi 2.5 base of Composer 2 complicated that story, but the direction is clear. In the agentic coding era, the editor, the agent, and the model are converging into one product, and Cursor intends to own all three layers.