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Cursor announced Thursday the launch of Cursor 3, a new product interface that allows users to spin up AI coding agents to complete tasks on their behalf. The product, which was developed under the code name Glass, is Cursor\u2019s response to agentic coding tools like Anthropic\u2019s Claude Code and OpenAI\u2019s Codex, which have taken off with millions of developers in recent months.<\/p>\n
\u201cIn the last few months, our profession has completely changed,\u201d said Jonas Nelle, one of Cursor\u2019s heads of engineering, in an interview with WIRED. \u201cA lot of the product that got Cursor here is not as important going forward anymore.\u201d<\/p>\n
Cursor increasingly finds itself in competition with leading AI labs for developers and enterprise customers. The company pioneered one of the first and most popular ways for developers to code with AI models from OpenAI, Anthropic, and Google\u2014making Cursor one of these companies\u2019 biggest AI customers. But in the last 18 months, OpenAI and Anthropic have launched agentic coding products of their own, and started offering them through highly subsidized subscriptions that have put pressure on Cursor\u2019s business.<\/p>\n
While Cursor\u2019s core product lets developers code in an integrated development environment (IDE) and tap an AI model for help, new products like Claude Code and Codex center around allowing developers to off-load entire tasks to an AI agent\u2014sometimes spinning up multiple agents at the same time. Cursor 3 is the startup\u2019s version of an \u201cagent-first\u201d coding product. According to Nelle, the product is optimized for a world where developers spend their days \u201cconversing with different agents, checking in on them, and seeing the work that they did,\u201d rather than writing code themselves.<\/p>\n
Cursor is launching its new agentic coding interface inside its existing desktop app, where it will live alongside the IDE. At the center of a new window in Cursor, there\u2019s a text box where users can type, in natural language, a task they\u2019d like an AI agent to complete\u2014it looks more like a chatbot than a coding environment. Press enter, the AI agent sets to work without requiring the developer to write a single line of code. In a sidebar on the left, developers can view and manage all of the AI agents they have running in Cursor.<\/p>\n
What\u2019s unique about Cursor 3, compared to desktop apps for Claude Code and Codex, is that it integrates an agent-first product with Cursor\u2019s AI-powered development environment. In a demo, Cursor\u2019s other cohead of engineering for Cursor 3, Alexi Robbins, showed WIRED how users can prompt an agent in the cloud to spin up a feature, and then review the code it generated locally on their computer.<\/p>\n
Nelle and Robbins argue it doesn\u2019t matter which interface developers are spending their time in\u2014they just want people using Cursor.<\/p>\n
I visited Cursor's office in San Francisco's North Beach neighborhood last week. The startup is reportedly raising fresh capital at a $50 billion valuation\u2014nearly double what it was valued in a funding round last fall\u2014and has expanded into an old movie theater. Cursor employees used to toss their shoes in a pile by the door upon entry, but now there's a row of large shoe racks, signaling one way in which the company is growing up.<\/p>\n
Yet Cursor still feels like a startup. Employees tell me that\u2019s part of the appeal of working there; the company can ship quickly and doesn't feel too corporate. But as it finds itself racing to catch up to Anthropic and OpenAI in the agentic coding race, that scrappiness may not be enough. This battle\u2014the one to create the best AI coding agent\u2014may be Cursor\u2019s most capital-intensive chapter yet.<\/p>\n
Several developers tell WIRED that they\u2019ve shifted most of their AI coding work to Claude Code and Codex, and away from Cursor. A large reason is the aforementioned subsidized subscriptions. WIRED has previously reported that Claude Code and Codex users can get well over $1000 worth of usage for their $200-a-month plans.<\/p>\n
Ronald Mannak, founder of the startup Pico AI\u2014which makes AI tools for Apple developers\u2014says he\u2019s largely shifted from using Cursor and Windsurf to agent-first products like Claude Code and Codex. He says his decision is largely driven by whichever tool has the most generous rate limit. Jack Crawford, cofounder of the AI memory startup mVara, says he rarely ever uses Cursor or Windsurf anymore, despite heavily using those tools last year. He now goes to Claude Code because of the value of the subscription.<\/p>\n
Cursor offered a heavily subsidized subscription plan for its AI coding tool until June 2025, when the startup announced it would start charging developers through usage-based pricing. This upset developers at the time, but was part of an effort for the young startup to improve its margins and build a more sustainable business. OpenAI and Anthropic have raised tens of billions of dollars more than Cursor, so they can afford to keep spending heavily on customer acquisition (though Anthropic is starting to adjust its rate limits for Claude Code subscriptions). But Cursor says it has other strategies to compete with the leading AI labs.<\/p>\n
Cursor has also started training in-house AI models that it can cost effectively serve to customers. The startup recently launched Composer 2, an AI model based on an open-source system from the Chinese AI lab Moonshot AI, that Cursor did additional pretraining and post-training on. Nelle tells me people usually pick AI models in Cursor based on some combination of performance, price, and speed\u2014and he argues that Composer 2 is competitive on those fronts. Cursor says it plans to train future Composer models completely from scratch.<\/p>\n
But training AI models is quite an expensive undertaking. Cursor has historically done well doing more with less, though the AI coding race is now heating up. OpenAI and Anthropic have recognized how large the business around these tools could be and are investing in them heavily. A lot of these companies are also converging on similar products, in which agents are taking on more and more of a developer\u2019s workload. In the agent-first world, it\u2019s hard to imagine how Cursor can stay competitive without raising significantly more capital\u2014and fast.<\/p>\n
This is an edition of<\/em> Maxwell Zeff\u2019s<\/em><\/a> Model Behavior newsletter<\/strong><\/em><\/a>. Read previous newsletters<\/em> here.<\/strong><\/em><\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Save StorySave this storySave StorySave this story Cursor announced Thursday the launch of Cursor 3, a new product interface that allows users to spin up AI coding agents to complete tasks on their behalf. The product, which was developed under the code name Glass, is Cursor\u2019s response to agentic coding tools like Anthropic\u2019s Claude Code […]<\/p>\n","protected":false},"author":1,"featured_media":48594,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[],"class_list":{"0":"post-48593","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"_links":{"self":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts\/48593","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/comments?post=48593"}],"version-history":[{"count":0,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts\/48593\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/media\/48594"}],"wp:attachment":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/media?parent=48593"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/categories?post=48593"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/tags?post=48593"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}