Cursor raised 900M, are losing market share to claude code(resorting to poaching 2 leads from there [1]), AND they're decreasing the value of their product? Huge red flag. They should be able to burn cash like no tomorrow. Also, the PR language on this post, and the timing(midnight on a US holiday) is not ideal.
This news coupled with google raising the new gemini flash cost by 5x, azure dropping their startup credits, and 2-3 others(papers showing RL has also hit a wall for distilling or improving models), are now solid signals that despite what Sam altman says, intelligence will NOT be soon too cheap to meter. I think we are starting to see the squeeze from the big players. Interesting. I wonder how many startups are betting on models becoming 5-10x cheaper for their business models. If on device models don't get good, I bet a lot of them are in big trouble
> I think we are starting to see the squeeze from the big players.
I’m not convinced that these price increases represent an attempt to squeeze more profit out of a saturated market.
To me they look an awful lot like people realising that the sheer compute cost associated with modern models makes the historical zero-marginal cost model of software impossible. API calls to LLM models have far more in common with making calls to EC2 or Lambda for compute, than they do a standard API calls for SaSS.
A lot of early LLM based business models seemed to assume that the historical near zero-marginal cost of delivery for software would somehow apply to hosted LLM models which clearly isn’t the case.
You mix that in with rising datacenter costs, driven by lack of available electricity infrastructure to meet their demands, plus everyone trying to grab as much LLM land as possible, which requires more datacenters, more faster. And the result is rapidly increasing base costs for compute. Which we’re now seeing reflected in LLM pricing.
For me the thing that stands out about LLMs, is that their compute costs are easily 100-10000x greater per API call than a traditional SaSS API call. That fact alone should be enough for people to realise that the historically bottomless VC money that normal funds this stuff, isn’t quite a bottomless as it needs to be to meaningfully subsidise consumer pricing.
Very insightful. I think the payment model would have worked out just fine if the state of the art was the optimization of GPT-4 class models to bring down the cost over time, which would have made the services profitable eventually. Instead, newer models are getting larger and more resource heavy through reasoning, meaning costs per request are going up instead of down.
I think we’ll start seeing people focus on optimisation, we already see companies like Apple focus on it.
LLM are still to new, and still advancing to quickly for optimisation to take place. It’s like we’re back in the MHz wars of old between CPU manufacturers. The goal is just more performance, regardless of cost, because it was clear that even in the consumer space, people wanted more performance.
Then we hit a kind of plateau in last 10 years, where basic compute is so powerful that your average consumer is not longer upgrading every year for better performance. A 5 year old machine has enough performance for most people. Then the focus on energy efficiency kicked in, because people didn’t want faster computers, they wanted battery life and cheaper computers.
No doubt we’ll see the same with LLM, possibly quite soon. Claude Sonnet 4 and similar class models have enough reasoning performance, that agentic systems can be quite reliable. Which means we hit the base level of “reasoning” performance needed, and we can extend that “performance” in domain specific ways by lightly customising the agentic framework, with no need to fine tuning. The elimination of fine tuning to build domain specific agents is a huge game changer. But it also means that putting together a 10x or 100x efficient model, with “reasoning” performance equivalent to current gen LLM would also be a huge game changer. It opens up the possibility to apply this tech into spaces that currently require either lots of specialists knowledge to fine tune an LLM, or a huge amount of on tap compute to allow the agents to take enough turns to slowly “reason” they’re way through problems.
But a Claude Sonnet 4 that runs on a iPhone for example. That would make Apple’s complete failure to improve Siri look like a genius level move. Why bother with small incremental improvements using current tech, when waiting a few years, and just stuffing a full fat LLM and agent system into an iPhone will basically give you the ultimate Siri.
Supply and demand says otherwise. I think costs are actually going to go up.
Right now they are trying to make sure the AI you run on your phone can't be used for coding or other tasks. They want to keep it expensive. They have no incentive to make it more efficient. No need.
The models aren't designed for efficiency either. There was a little scare with DeepSeek, but it turned out to be nothing. At the end of the day you need a lot of hardware and juice to run these things at scale. The costs aren't coming down any time soon. Nor is the impact to the environment unfortunately either.
Who is they? Even if Anthropic doesn’t have incentive to run their models on your phone (but really why wouldn’t they?), Apple, Google, and Samsung do. And DeepSeek was very much a something. It was a something that demonstrated the barrier to entry can be at least an order of magnitude lower than previously thought. LLM technology is easily commoditized, and moat building will be difficult. Supply and demand is doing just what you would expect.
It was obvious that they over raised. It's insane to raise that kinda money to go sell an open-source and otherwise free code editor that wraps an LLM that you don't own or host. So you're not providing the service, you don't have to code much of a product because you're front loaded 95% of the product with open source...you have no secret sauce... And you're going to raise that kinda money for what exactly? In hopes you can fool a bunch of people?
Do they think they're secret sauce is UX? There's better editors out there now too.
You want to know what the hype train of Cursor was for? It was marketing for LLMs.
Currently Cerebras, although faster, is more expensive than the traditional alternatives. Cursor's use case doesn't benefit from instant, users are happy to wait the few seconds (and watching the magic may even be beneficial)
Fancy hardware with bespoke production process, smaller economies of scale, utilization probably not that great since they are user-speed positioning and purportedly under-invested in their compiler, which has a hard job compiling for such an arch anyways. Ignoring for the moment the cost for their bespoke software stack, which they can probably amortize away eventually.
I doubt Cerebras has even close to the scale to be a major player in this area.
Nvidia sold $35B of just datacenter GPUs last year. Of which the vast majority will be used for AI.
Cerebra entire revenue last year was only $78M. That’s three orders of magnitude smaller than Nvidia datacenter GPU business. Scaling a company 10X in a year is a pretty hard thing to do, and it’s not a question of money, it’s a question of people and organisation. So much stuff in a business breaks when it scales 10X, that it take months to years to fix enough stuff to support another 10x growth spurt without everything just imploding.
And also if they can keep up. Imagine not just selling that many GPUs, but selling that many new GPUs every few years for the same amount of money or more. Where the previous generation hardware becomes almost worthless.
The insane thing here is that $35B worth of GPUs will be worth more like $350m in a few years. Or less. Who can keep up with that???
Cursor is an interesting case study on the wrapper vs. core debate. They were the first big success story in the coding space, enjoyed first mover advantages, and sweetheart deals with volume tokens from providers.
Now that all the providers have moved towards in-housing their coding solutions, the sweetheart deals are gone. And the wrapper goes back to "at cost" usage. Which, on paper should be less value / $ than any of the tiers offered by the providers themselves.
Whatever data they collected, and whatever investments they made in core tech remains to be seen. And it's a question of making use of that data. We can see that it is highly valuable for providers (as they all subsidise usage to an extent). Goog is offering lots of stuff for free, presumably to collect data.
One interesting distinction is on cursor vs. windsurf. Windsurf actually developed some internal models (either pre-trained or post-trained I don't know, but probably doesn't matter much) swe1 and swe1-lite that are actually pretty good on their own. I don't think cursor has done that, beyond their tab-next-prediction model. A clue, perhaps.
Anyway, it will be interesting to see how this all unfolds 2-5 years from now.
I think LLM agents have completely broken the business model that companies like Cursor were founded on.
Early on Cursor added value by finding clever to integrate LLM into an IDE, which would allow single shot output of an LLM to produce something useful, and do so quickly. That required a fair bit of engineering to make happen reliably.
But LLM agents completely break that. The moment people realised that rather than trying to bend our tools to work within the limits of an LLM, we could instead just make LLM “self-prompt” their way to better outputs, Cursors model stopped being viable.
It’s another classic case of the AI “Bitter Lesson”[0] being learned. Throwing more data, and more compute at AI produces faster, better progress, than careful methodical engineering.
I think I might be missing something. I use Cursor daily as part of my development process and it feels like magic.
I've tried Aider and other agentic options and its amazingly clunky. Maybe I'm looking at the "apple vs linux" effect: I'm the apple user that just expect things to work out of the box, and although there are way better alternatives, the integration is worse.
They built nothing that someone else couldn't...and didn't. They got nothing.
This is also a bit of foreshadowing for all SaaS by the way.
Remember, nothing prevents anyone from simply vibe coding anything they see out there in the future. It turns the value of all software to near $0.
Cursor will go under. They'll be acquired for cheap (making more headlines, good press!), go bankrupt, or completely change their business into something else and undergo major restructuring. The point of Cursor is NOT to be a profitable ai code editor business. Look at the investors. Thrive dumped over $9B, using that $9B to advertise, market, and sell the product and services offered by the other companies they invest in -- the LLMs. At the end of the day, that's where the money flows.
In fact, none of the investors care one bit of Cursor survives. It's served its purpose. It was the "freebie" that people give out, the appetizer, for something bigger.
I’m interested if anyone here knows what exactly Cursor has built? My limited understanding is that they’ve done nothing but fork VS code and add a chat window and AI-integrated editing tools.
Basically...but, no, I mean they have some features that provide UX around prompting an LLM and then taking the output and using it to edit files for you. It's a "quality of life" or productivity tool.
It's useful and has SOME value. Just not enough unfortunately.
This is history repeating itself. How could a company that raised so much money possibly compete with another that has the same ... arguably better ... product for less? Marketing budget? Hype? First to market? Sure. Absolutely. All those things do fade though.
We've seen this movie before. Remember Sublime Text? Remember what happened when Atom and VS Code came along? Fortunately Sublime Text didn't over raise (if they raised anything at all, I can't remember). Point is, people catch on and save money if they can. So they will do the same with Cursor.
Use open source editors that have the same features...better ones even. I'll argue that Roo Code is much much better than Cursor. I even like Windsurf better to be honest, but I wouldn't pay for either. I'll support open-source and save my money to pay the LLM.
Cursor is about to go the way of Sublime Text or Notepad++. Might keep some cult following, but it's market share will drop off a cliff.
It's ok. Their investors don't care! This was all to get people to use LLMs more. Their investors are fine with the sacrifice. That's all it ever was.
Google has done nothing but make another search engine, Apple has done nothing but make another phone, Ferrari has done nothing but make another car, etc.
The search engine was just a tool for their real product. Ads. Now, AI. They're so unconcerned about search that they are replacing it with Gemini answers.
I saw an ad today OpenAI offering free AI interior design mock-up. Not sure if it a specific feature or just way to use image generation but either way they are commoditizing the thin wrappers.
There's is absolutely nothing that Cursor has that anyone else can't easily and doesn't already. In fact better. Open-source solutions already outpace Cursor.
The difference is open-source doesn't exactly have a giant marketing budget. So most people haven't caught on yet, but they will.
'We previously described ... as "rate limits", which wasn't an intuitive way to describe the limit. It is a usage credit pool'
Very strange that they decided to describe monthly credits as rate limits, and then spin it as 'unintuitive'. Feels like someone is trying to pull a fast one.
Well, rate limits take a moving window of time (say, one second) and check how many requests you make during that time, and throttle you, if necessary.
I’ve deleted all of these wrappers (cursor, windsurf etc) after discovering Claude Code on pro. I’m not sure how it does it, but it’s just better. And ultimately, more cost effective.
I think it’s fundamentally about context management and business model. Claude Code is expensive because it will happily put very large volumes into context because Anthropic are paid by the token. Cursor makes the bet that it can pay less per token whilst giving you enough value to still make margins on your $20 per month (assuming you’re using their default models).
This all becomes very clear when you do something that feels like magic in Claude Code and then run /cost and see you’ve blown through $10 in a single hour long session. Which is honestly worth it for me.
Roo Code manages context a LOT better than Cursor or Windsurf. Cursor and Windsurf don't care about this because they want people to use more tokens. Their investors want more people to use tokens.
Think about this one. They don't even tell you what your usage is! Look at Roo Code showing you the context usage and cost of each conversation. Features to compact the context. It's built around bringing awareness to the unit economics of AI and built to give users choice. The tools that work to keep users in the dark are serving someone else's interests.
I’ve found cursor to be meaningfully faster, and tab autocomplete is really nice. It’s not like I can avoid touching code anyways, and when I do, cursor tab is near perfect at being a very smart auto complete. Claude is running through AWS bedrock though, so that could be the performance issue. But I do much prefer the terminal app for prompting
That adage that "this is the worst it'll ever be" when people espouse AI coding agents is looking a bit shoddy. No, costs don't inevitably go down when you're on a sweetheart deal.
"We’re improving how we communicate future pricing changes" like clearly and explicitly stating what your customers are paying for ? What kind of BS is this ?
Have people been dropping cursor usage for Claude code? I have dropped to using cursor as just an ide with auto complete. Curious if others are doing this too.
LLMs are literally auto-complete models. I just so happens that when your auto-complete model gets big enough, and you poke it in the right way, it accidentally pretends to be intelligent. And it turns out, that pretending to be intelligent is almost as useful as actually being intelligent.
Cursor’s autocomplete is SuperMaven (which they acquired).
From the site :
“Supermaven uses Babble, a proprietary language model specifically optimized for inline code completion. Our in-house models and serving infrastructure allow us to provide the fastest completions and the longest context window of any copilot.”
Claude Code makes me feel like I'm dispatching a legit engineer to go get something done. But they come back in a minute instead of a week. Most of the time the solution gets the job done. Sometimes it introduces too much complexity, sometimes it's totally wrong, but it gets the job done. Cursor meanwhile just feels like shortening the (copy editor/paste chat/copy chat/paste editor) loop.
For $200/month you can get equivalent value to a team of engineers. Plan accordingly! The stack is no longer safe for employment. You need to move up to manager or move down to metal.
It’s a good question. I think a better benchmark than the current options is “go make $X dollars this quarter.” Right now the models fail this miserably. Claude can’t even run a vending machine inside Anthropic HQ. So there is still some kind of strategic activity that comes naturally to humans that LLMs struggle with. I know the big conundrum is “scaling solves this in the next N years” but my bet is that N > ~20 in this case.
Last week stripped out all CSS from a fairly substantial project and replaced with Tailwind equivs, it got all but a few cases right
That was gemini-cli, I could see some mistakes on trial run so created a GEMINI.md with system prompt and project description (about 50 lines) which clarified some tricky source layout situations
Second run it was fine, ran for about an hour or so -- I had attempted to do it manually a while back but it started to look like it would take a week or two
I recently started getting the feeling that they also make their workflows way more inefficient for me: their models started to always ask "do you want me to make that change for you", before they made the edits and I would simply reject them if they were not what I needed.
For me personally, I only care about the tab autocomplete. If that's a feature I have unlimited access to, I will happily pay $20/month for 10x productivity.
$20 on API pricing is what Claude Pro will give you in a day. It doesn't matter how good cursor is, this is a massive limitation and price differential that they can't overcome. Even if they go with DeepSeek which is much cheaper, they are still significantly more expensive than a Claude subscription.
That's what Claude Pro will give you... now. As with Cursor there's no guarantee that it'll last. Next year, next month, next week, they may change their pricing when the competition runs dry.
Also, that wonderful big beautiful bill in the US just limited what states and government can do to AI. It's a clear and open highway for Anthropic, OpenAI, Google, etc. They don't have to worry about any kinda rug pulling on Cursor or anything. They can literally compete with their "customers" and put their "customers" or "partners" out of business with zero consequences.
NB. For the time-being at least, you can OPT OUT of the new pricing on the Settings Menu in Advanced Settings.
Cursor deserve the criticism, but its been pretty obvious since they introduced the new Ultra plan that we were going to see classic enshittification on the formerly premium options. Very frustrating for long term supporters especially.
Note that although this update apologises for the miscommunication (which looks more like deliberate obfuscation), the only option for getting what we paid for (I'm on the annual plan) is the menu setting above, which should be default on!
Or any other open source solution. They're all going to be the same or better. Cursor is cooked. Trying to compete with open source lol. They should study the thing they're so dependent on - VS Code. A history lesson in how VS Code came to be would be good for them.
Cursor raised 900M, are losing market share to claude code(resorting to poaching 2 leads from there [1]), AND they're decreasing the value of their product? Huge red flag. They should be able to burn cash like no tomorrow. Also, the PR language on this post, and the timing(midnight on a US holiday) is not ideal.
This news coupled with google raising the new gemini flash cost by 5x, azure dropping their startup credits, and 2-3 others(papers showing RL has also hit a wall for distilling or improving models), are now solid signals that despite what Sam altman says, intelligence will NOT be soon too cheap to meter. I think we are starting to see the squeeze from the big players. Interesting. I wonder how many startups are betting on models becoming 5-10x cheaper for their business models. If on device models don't get good, I bet a lot of them are in big trouble
[1] https://www.investing.com/news/economy-news/anysphere-hires-...
> I think we are starting to see the squeeze from the big players.
I’m not convinced that these price increases represent an attempt to squeeze more profit out of a saturated market.
To me they look an awful lot like people realising that the sheer compute cost associated with modern models makes the historical zero-marginal cost model of software impossible. API calls to LLM models have far more in common with making calls to EC2 or Lambda for compute, than they do a standard API calls for SaSS.
A lot of early LLM based business models seemed to assume that the historical near zero-marginal cost of delivery for software would somehow apply to hosted LLM models which clearly isn’t the case.
You mix that in with rising datacenter costs, driven by lack of available electricity infrastructure to meet their demands, plus everyone trying to grab as much LLM land as possible, which requires more datacenters, more faster. And the result is rapidly increasing base costs for compute. Which we’re now seeing reflected in LLM pricing.
For me the thing that stands out about LLMs, is that their compute costs are easily 100-10000x greater per API call than a traditional SaSS API call. That fact alone should be enough for people to realise that the historically bottomless VC money that normal funds this stuff, isn’t quite a bottomless as it needs to be to meaningfully subsidise consumer pricing.
I don’t see any difference between your perception of events and “the squeeze,” except yours has more details. I think you and GP actually agree
(Edited for tone)
Very insightful. I think the payment model would have worked out just fine if the state of the art was the optimization of GPT-4 class models to bring down the cost over time, which would have made the services profitable eventually. Instead, newer models are getting larger and more resource heavy through reasoning, meaning costs per request are going up instead of down.
I think we’ll start seeing people focus on optimisation, we already see companies like Apple focus on it.
LLM are still to new, and still advancing to quickly for optimisation to take place. It’s like we’re back in the MHz wars of old between CPU manufacturers. The goal is just more performance, regardless of cost, because it was clear that even in the consumer space, people wanted more performance.
Then we hit a kind of plateau in last 10 years, where basic compute is so powerful that your average consumer is not longer upgrading every year for better performance. A 5 year old machine has enough performance for most people. Then the focus on energy efficiency kicked in, because people didn’t want faster computers, they wanted battery life and cheaper computers.
No doubt we’ll see the same with LLM, possibly quite soon. Claude Sonnet 4 and similar class models have enough reasoning performance, that agentic systems can be quite reliable. Which means we hit the base level of “reasoning” performance needed, and we can extend that “performance” in domain specific ways by lightly customising the agentic framework, with no need to fine tuning. The elimination of fine tuning to build domain specific agents is a huge game changer. But it also means that putting together a 10x or 100x efficient model, with “reasoning” performance equivalent to current gen LLM would also be a huge game changer. It opens up the possibility to apply this tech into spaces that currently require either lots of specialists knowledge to fine tune an LLM, or a huge amount of on tap compute to allow the agents to take enough turns to slowly “reason” they’re way through problems.
But a Claude Sonnet 4 that runs on a iPhone for example. That would make Apple’s complete failure to improve Siri look like a genius level move. Why bother with small incremental improvements using current tech, when waiting a few years, and just stuffing a full fat LLM and agent system into an iPhone will basically give you the ultimate Siri.
Supply and demand says otherwise. I think costs are actually going to go up.
Right now they are trying to make sure the AI you run on your phone can't be used for coding or other tasks. They want to keep it expensive. They have no incentive to make it more efficient. No need.
The models aren't designed for efficiency either. There was a little scare with DeepSeek, but it turned out to be nothing. At the end of the day you need a lot of hardware and juice to run these things at scale. The costs aren't coming down any time soon. Nor is the impact to the environment unfortunately either.
Who is they? Even if Anthropic doesn’t have incentive to run their models on your phone (but really why wouldn’t they?), Apple, Google, and Samsung do. And DeepSeek was very much a something. It was a something that demonstrated the barrier to entry can be at least an order of magnitude lower than previously thought. LLM technology is easily commoditized, and moat building will be difficult. Supply and demand is doing just what you would expect.
It was obvious that they over raised. It's insane to raise that kinda money to go sell an open-source and otherwise free code editor that wraps an LLM that you don't own or host. So you're not providing the service, you don't have to code much of a product because you're front loaded 95% of the product with open source...you have no secret sauce... And you're going to raise that kinda money for what exactly? In hopes you can fool a bunch of people?
Do they think they're secret sauce is UX? There's better editors out there now too.
You want to know what the hype train of Cursor was for? It was marketing for LLMs.
What happened to wafer inference hardware like Cerebras? Why isn't Claude being served from that if it's so much faster and energy efficient?
Currently Cerebras, although faster, is more expensive than the traditional alternatives. Cursor's use case doesn't benefit from instant, users are happy to wait the few seconds (and watching the magic may even be beneficial)
How is it more expensive?
Fancy hardware with bespoke production process, smaller economies of scale, utilization probably not that great since they are user-speed positioning and purportedly under-invested in their compiler, which has a hard job compiling for such an arch anyways. Ignoring for the moment the cost for their bespoke software stack, which they can probably amortize away eventually.
I doubt Cerebras has even close to the scale to be a major player in this area.
Nvidia sold $35B of just datacenter GPUs last year. Of which the vast majority will be used for AI.
Cerebra entire revenue last year was only $78M. That’s three orders of magnitude smaller than Nvidia datacenter GPU business. Scaling a company 10X in a year is a pretty hard thing to do, and it’s not a question of money, it’s a question of people and organisation. So much stuff in a business breaks when it scales 10X, that it take months to years to fix enough stuff to support another 10x growth spurt without everything just imploding.
And also if they can keep up. Imagine not just selling that many GPUs, but selling that many new GPUs every few years for the same amount of money or more. Where the previous generation hardware becomes almost worthless.
The insane thing here is that $35B worth of GPUs will be worth more like $350m in a few years. Or less. Who can keep up with that???
What’s funny is even electricity (nuclear in particular) isn’t ’too cheap to meter’ as originally promised. It’s actually the most expensive.
> papers showing RL also hitting a wall
any reference for this?
Heh. Qwen3 still works on my machine.
Cursor is an interesting case study on the wrapper vs. core debate. They were the first big success story in the coding space, enjoyed first mover advantages, and sweetheart deals with volume tokens from providers.
Now that all the providers have moved towards in-housing their coding solutions, the sweetheart deals are gone. And the wrapper goes back to "at cost" usage. Which, on paper should be less value / $ than any of the tiers offered by the providers themselves.
Whatever data they collected, and whatever investments they made in core tech remains to be seen. And it's a question of making use of that data. We can see that it is highly valuable for providers (as they all subsidise usage to an extent). Goog is offering lots of stuff for free, presumably to collect data.
One interesting distinction is on cursor vs. windsurf. Windsurf actually developed some internal models (either pre-trained or post-trained I don't know, but probably doesn't matter much) swe1 and swe1-lite that are actually pretty good on their own. I don't think cursor has done that, beyond their tab-next-prediction model. A clue, perhaps.
Anyway, it will be interesting to see how this all unfolds 2-5 years from now.
I think LLM agents have completely broken the business model that companies like Cursor were founded on.
Early on Cursor added value by finding clever to integrate LLM into an IDE, which would allow single shot output of an LLM to produce something useful, and do so quickly. That required a fair bit of engineering to make happen reliably.
But LLM agents completely break that. The moment people realised that rather than trying to bend our tools to work within the limits of an LLM, we could instead just make LLM “self-prompt” their way to better outputs, Cursors model stopped being viable.
It’s another classic case of the AI “Bitter Lesson”[0] being learned. Throwing more data, and more compute at AI produces faster, better progress, than careful methodical engineering.
[0] http://www.incompleteideas.net/IncIdeas/BitterLesson.html
I think I might be missing something. I use Cursor daily as part of my development process and it feels like magic.
I've tried Aider and other agentic options and its amazingly clunky. Maybe I'm looking at the "apple vs linux" effect: I'm the apple user that just expect things to work out of the box, and although there are way better alternatives, the integration is worse.
They built nothing that someone else couldn't...and didn't. They got nothing.
This is also a bit of foreshadowing for all SaaS by the way.
Remember, nothing prevents anyone from simply vibe coding anything they see out there in the future. It turns the value of all software to near $0.
Cursor will go under. They'll be acquired for cheap (making more headlines, good press!), go bankrupt, or completely change their business into something else and undergo major restructuring. The point of Cursor is NOT to be a profitable ai code editor business. Look at the investors. Thrive dumped over $9B, using that $9B to advertise, market, and sell the product and services offered by the other companies they invest in -- the LLMs. At the end of the day, that's where the money flows.
In fact, none of the investors care one bit of Cursor survives. It's served its purpose. It was the "freebie" that people give out, the appetizer, for something bigger.
I’m interested if anyone here knows what exactly Cursor has built? My limited understanding is that they’ve done nothing but fork VS code and add a chat window and AI-integrated editing tools.
Basically...but, no, I mean they have some features that provide UX around prompting an LLM and then taking the output and using it to edit files for you. It's a "quality of life" or productivity tool.
It's useful and has SOME value. Just not enough unfortunately.
This is history repeating itself. How could a company that raised so much money possibly compete with another that has the same ... arguably better ... product for less? Marketing budget? Hype? First to market? Sure. Absolutely. All those things do fade though.
We've seen this movie before. Remember Sublime Text? Remember what happened when Atom and VS Code came along? Fortunately Sublime Text didn't over raise (if they raised anything at all, I can't remember). Point is, people catch on and save money if they can. So they will do the same with Cursor.
Use open source editors that have the same features...better ones even. I'll argue that Roo Code is much much better than Cursor. I even like Windsurf better to be honest, but I wouldn't pay for either. I'll support open-source and save my money to pay the LLM.
Cursor is about to go the way of Sublime Text or Notepad++. Might keep some cult following, but it's market share will drop off a cliff.
It's ok. Their investors don't care! This was all to get people to use LLMs more. Their investors are fine with the sacrifice. That's all it ever was.
Google has done nothing but make another search engine, Apple has done nothing but make another phone, Ferrari has done nothing but make another car, etc.
The search engine was just a tool for their real product. Ads. Now, AI. They're so unconcerned about search that they are replacing it with Gemini answers.
Eh that’s not quite fair. Google isn’t wrapping a search engine. Apple isn’t selling slightly optimized versions of other manufacturers’ phones.
Cursor is a solid tool but as best I can tell there’s not a ton there.
They have their own models, though, and their code completion is basically magic. It's not just a UI around GPT.
I saw an ad today OpenAI offering free AI interior design mock-up. Not sure if it a specific feature or just way to use image generation but either way they are commoditizing the thin wrappers.
Cursor developed their own tab models IIRC
There's is absolutely nothing that Cursor has that anyone else can't easily and doesn't already. In fact better. Open-source solutions already outpace Cursor.
The difference is open-source doesn't exactly have a giant marketing budget. So most people haven't caught on yet, but they will.
but Gemini is perfect for tab completion, and the price for Gemini will be always lower
Confusing pricing models generally don't tend to do well.
Well, rate limits take a moving window of time (say, one second) and check how many requests you make during that time, and throttle you, if necessary.
Cursor just makes that window one month long.
Technically, that's a rate limit.
But yeah, only technically.
I’ve deleted all of these wrappers (cursor, windsurf etc) after discovering Claude Code on pro. I’m not sure how it does it, but it’s just better. And ultimately, more cost effective.
I think it’s fundamentally about context management and business model. Claude Code is expensive because it will happily put very large volumes into context because Anthropic are paid by the token. Cursor makes the bet that it can pay less per token whilst giving you enough value to still make margins on your $20 per month (assuming you’re using their default models).
This all becomes very clear when you do something that feels like magic in Claude Code and then run /cost and see you’ve blown through $10 in a single hour long session. Which is honestly worth it for me.
Roo Code manages context a LOT better than Cursor or Windsurf. Cursor and Windsurf don't care about this because they want people to use more tokens. Their investors want more people to use tokens.
Think about this one. They don't even tell you what your usage is! Look at Roo Code showing you the context usage and cost of each conversation. Features to compact the context. It's built around bringing awareness to the unit economics of AI and built to give users choice. The tools that work to keep users in the dark are serving someone else's interests.
I’ve found cursor to be meaningfully faster, and tab autocomplete is really nice. It’s not like I can avoid touching code anyways, and when I do, cursor tab is near perfect at being a very smart auto complete. Claude is running through AWS bedrock though, so that could be the performance issue. But I do much prefer the terminal app for prompting
how many requests do you get per 5 hour window?
More than I can use on the $200 plan, and I hit it hard 9 hours a day. It’s mind blowingly good at react and sql as well as cli tools
That adage that "this is the worst it'll ever be" when people espouse AI coding agents is looking a bit shoddy. No, costs don't inevitably go down when you're on a sweetheart deal.
The Uber effect.
"We’re improving how we communicate future pricing changes" like clearly and explicitly stating what your customers are paying for ? What kind of BS is this ?
I moved to Claude Code, Ghostty, Tmux and NeoVim. Very happy with my setup.
Not because of Cursor‘s pricing, but because in the end Claude Code is unmatched.
I seem to like cursor agent with sonnet. Or even copilot agent with sonnet. The editor integrated agent feels better.
For example they can react to in editor linter errors without running a lint command etc.
Claude Code can also do that if you pair it with the VS Code extension.
Have people been dropping cursor usage for Claude code? I have dropped to using cursor as just an ide with auto complete. Curious if others are doing this too.
Dropped it long ago for Roo Code personally.
Auto complete isn’t an AI thing
LLMs are literally auto-complete models. I just so happens that when your auto-complete model gets big enough, and you poke it in the right way, it accidentally pretends to be intelligent. And it turns out, that pretending to be intelligent is almost as useful as actually being intelligent.
Cursor’s autocomplete is SuperMaven (which they acquired).
From the site : “Supermaven uses Babble, a proprietary language model specifically optimized for inline code completion. Our in-house models and serving infrastructure allow us to provide the fastest completions and the longest context window of any copilot.”
Claude Code makes me feel like I'm dispatching a legit engineer to go get something done. But they come back in a minute instead of a week. Most of the time the solution gets the job done. Sometimes it introduces too much complexity, sometimes it's totally wrong, but it gets the job done. Cursor meanwhile just feels like shortening the (copy editor/paste chat/copy chat/paste editor) loop.
For $200/month you can get equivalent value to a team of engineers. Plan accordingly! The stack is no longer safe for employment. You need to move up to manager or move down to metal.
> You need to move up to manager or move down to metal.
Why couldn't Claude do a managers job?
It’s a good question. I think a better benchmark than the current options is “go make $X dollars this quarter.” Right now the models fail this miserably. Claude can’t even run a vending machine inside Anthropic HQ. So there is still some kind of strategic activity that comes naturally to humans that LLMs struggle with. I know the big conundrum is “scaling solves this in the next N years” but my bet is that N > ~20 in this case.
What's an example of something you've had Claude Code do that would take a software engineer a week to do? Just curious.
I see people mention converting old legacy code from an old language to something more modern. I've also seen people mention greenfield projects.
Anything other than this? I'm trying to bring this productivity to my work but so far haven't been able to replace a week of work in a few minutes yet
Last week stripped out all CSS from a fairly substantial project and replaced with Tailwind equivs, it got all but a few cases right
That was gemini-cli, I could see some mistakes on trial run so created a GEMINI.md with system prompt and project description (about 50 lines) which clarified some tricky source layout situations
Second run it was fine, ran for about an hour or so -- I had attempted to do it manually a while back but it started to look like it would take a week or two
I recently started getting the feeling that they also make their workflows way more inefficient for me: their models started to always ask "do you want me to make that change for you", before they made the edits and I would simply reject them if they were not what I needed.
I noticed that as well so fixed it out of auto mode and onto the Claude 4 Sonnet 4. It takes longer but gives a better results.
I also saw that it was 0.8x the ‘credit cost’ thinking still that I had 500.
Now to learn that the 500 has gone and you get unlimited only on auto shows how easy it has been to misunderstand what they’re trying to say.
Also, I’ve no idea how to find out the cost of MAX. Especially as their web agent has the text MAX next to the selected non-max model.
As the kids say, Cursor is cooked.
For me personally, I only care about the tab autocomplete. If that's a feature I have unlimited access to, I will happily pay $20/month for 10x productivity.
It is. Tab is always included.
Did they really drop this news at Friday night, on a holiday?
Maximum panic mode activated.
I was wondering who would catch that.
That's startups for you!
It's 9am on a workday somewhere in the world. Let's work!
tl;dr: They are f*ked and they have no way out.
$20 on API pricing is what Claude Pro will give you in a day. It doesn't matter how good cursor is, this is a massive limitation and price differential that they can't overcome. Even if they go with DeepSeek which is much cheaper, they are still significantly more expensive than a Claude subscription.
That's what Claude Pro will give you... now. As with Cursor there's no guarantee that it'll last. Next year, next month, next week, they may change their pricing when the competition runs dry.
They aren't the reseller.
Also, that wonderful big beautiful bill in the US just limited what states and government can do to AI. It's a clear and open highway for Anthropic, OpenAI, Google, etc. They don't have to worry about any kinda rug pulling on Cursor or anything. They can literally compete with their "customers" and put their "customers" or "partners" out of business with zero consequences.
With competition being Microsoft and Google, that might take a while ...
It'll not last but it might last longer than Cursor can remain solvent.
NB. For the time-being at least, you can OPT OUT of the new pricing on the Settings Menu in Advanced Settings.
Cursor deserve the criticism, but its been pretty obvious since they introduced the new Ultra plan that we were going to see classic enshittification on the formerly premium options. Very frustrating for long term supporters especially.
Note that although this update apologises for the miscommunication (which looks more like deliberate obfuscation), the only option for getting what we paid for (I'm on the annual plan) is the menu setting above, which should be default on!
Where exactly is the opt out?
https://cursor.com/dashboard?tab=settings > Advanced Account Settings > Opt Out of New Pricing
Cursor isn’t good. They mangle good models with bad prompts
Just switch to amp code, their agent is superior in every way. With their tooling you achieve even more although they are using the same models.
https://ampcode.com
Or any other open source solution. They're all going to be the same or better. Cursor is cooked. Trying to compete with open source lol. They should study the thing they're so dependent on - VS Code. A history lesson in how VS Code came to be would be good for them.