Summary of "You Won't Believe What Cursor AI Just Did (NEW UPDATE)"

Summary of Video Content

The video provides an in-depth analysis and update on Cursor AI’s recent pricing model changes, product features, and how these affect users—especially coders relying on AI-assisted coding tools.

Key Technological Concepts & Product Features

1. Cursor AI Pricing Model Changes

Originally, Cursor offered a simple $20/month plan with 500 fast AI requests and unlimited slow requests, providing near-unlimited AI coding access.
Recently, Cursor switched to a usage-based pricing model with multiple tiers:
- Pro ($20)
- Pro Plus ($60)
- Ultra ($200)
The new model removed the fixed 500-request limit and introduced unlimited usage only in “auto mode”, where users do not select specific AI models but are routed to whichever model has the most capacity (e.g., ChatGPT, Grock, Sonnet, Gemini, or Cursor’s own).
Preferred models (like Claude 4) are now limited by usage credits roughly equal to the plan cost, making unlimited usage impossible on those models.
Cursor clarified users can still switch back to the legacy 500-request plan temporarily.

2. Auto Mode & Model Selection

Auto mode offers unlimited requests but lacks transparency about which AI model processes the requests.
This mode is similar to the approach taken by Augment Code, another AI coding assistant.
The auto mode may be a strategic move by Cursor to balance capacity agreements with multiple AI providers.

3. Usage Transparency & Dashboard

Cursor introduced a subscription usage summary dashboard showing included usage credits per plan.
For example, the Ultra plan ($200) includes at least $400 worth of preferred model usage, plus unlimited auto mode access.
Despite the high cost of models like Claude’s Opus 4, the included usage exceeds the subscription price, showing some value.

4. Challenges & User Outrage

Many users are frustrated due to confusion over the new pricing, limits, and the removal of previously unlimited plans.
Rate limiting and unclear communication caused dissatisfaction.
Cursor acknowledged mistakes and offered usage refunds for affected users.

5. Comparison with Claude AI (Anthropic)

Claude Max plans have a different pricing and usage model based on 5-hour session windows with message limits.
Claude Max plans ($100 and $200 tiers) provide more predictable usage but have strict limits on expensive models like Opus 4.
Claude Max is more cost-effective for heavy users who want specific model access.
However, Claude Max lacks some of Cursor’s features like web agents and unlimited auto mode.

6. Product Usage Insights

The speaker (Rob) shares personal experience coding for 3 hours using Claude Opus 4, costing $151, highlighting the high cost of premium models.
He suggests that cheaper models like Sonnet provide similar performance at much lower cost.
He advises users to consider switching back to legacy plans if possible and to test the new auto mode before judging.

7. Market Position & Business Sustainability

Cursor is burning through VC funding and is not yet profitable.
The shift to usage-based pricing was expected due to the unsustainable cost of offering unlimited AI requests at $20/month.
Cursor aims to grow its user base and balance costs with capacity deals from AI model providers.

Reviews, Guides, or Tutorials Mentioned

Explanation of Cursor’s pricing changes and how to navigate new plans.
Recommendation to use the auto mode for unlimited usage, with caveats.
Comparison guide between Cursor Ultra and Claude Max plans for AI coding.
Mention of a prior video by the speaker demonstrating Cursor Ultra in action.
Promotion of Whisper Flow, an AI-powered dictation tool that integrates seamlessly with Cursor and other platforms, improving prompt input efficiency.

Main Speaker / Source

Rob – A seasoned coder and AI educator with 20+ years of experience, who explains the pricing changes, product features, and personal usage insights in an accessible manner.

Conclusion

Overall, the video serves as a detailed update and guide on Cursor AI’s new pricing structure. It clarifies misunderstandings, compares Cursor with competitors like Claude Max, and advises users on how to adapt to these changes while managing costs and expectations.