Cursor's Pricing Controversy: AI Coding Tool Faces Backlash Over Unclear Changes

Cursor apologizes for unclear pricing changes that upset users | TechCrunch

The CEO of Anysphere, the company behind the popular AI-powered coding environment Cursor, apologized Friday for a poorly communicated pricing change to its $20-per-month Pro plan. The changes resulted in some users complaining that they unexpectedly faced additional costs. "We recognize that we didn't handle this pricing rollout well and we're sorry," said Anysphere CEO Michael Truell in a blog post. "Our communication was not clear enough and came as a surprise to many of you." Truell is referring to a June 16 update to Cursor's Pro plan. Instead of Pro users getting 500 fast responses on advanced AI models from OpenAI, Anthropic, and Google, and then unlimited responses at a slower rate, the company announced subscribers would now get $20 worth of usage per month, billed at API rates. The new plan allows users to run coding tasks in Cursor with their AI model of choice until they hit the $20 limit, and then users have to purchase additional credits to continue using it. However, Pro users took to social media to file their complaints in the weeks following the announcement. Many users said they ran out of requests in Cursor rather quickly under the new plan, in some cases after just a few prompts when using Anthropic's new Claude models, which are particularly popular for coding. Other users claimed they were unexpectedly charged additional costs, not fully understanding they'd be charged extra if they ran over the $20 usage limit and had not set a spend limit. In the new plan, only Cursor's "auto mode," which routes to AI models based on capacity, offers unlimited usage for Pro users. Anysphere says it plans to refund users that were unexpectedly charged, and aims to be more clear about pricing changes moving forward. The company declined TechCrunch's request for comment beyond the blog post. Truell notes in the blog that Anysphere changed Cursor's pricing because "new models can spend more tokens per request on longer-horizon tasks" -- meaning that some of the latest AI models have become more expensive, spending a lot of time and computational resources to complete complicated, multi-step tasks. Cursor was eating those costs under its old Pro plan, but now, it's passing them along to users. While many AI models have lowered in price, the cutting edge of performance continues to be expensive -- in some cases, more pricey than ever. Anthropic's recently launched Claude Opus 4 model is $15 per million input tokens (roughly 750,000 words, longer than the entire "Lord of The Rings" series) and $75 per million output tokens. That's even more costly than Google's launch of Gemini 2.5 Pro in April, which was its most expensive AI model ever. In recent months, OpenAI and Anthropic have also started charging enterprise customers for "priority" access to AI models -- an additional premium on top of what AI models already cost that guarantees reliable, high speed performance. These expenses may be filtering their way down to AI coding tools, which seem to be getting more expensive across the industry. Users of another popular AI tool, Replit, were also caught off guard in recent weeks by pricing changes that made completing large tasks with AI more expensive. Cursor has become one of the most successful AI products on the market, reaching more than $500 million in ARR largely through subscriptions to its Pro plan. However, Cursor now faces intense competition from the AI providers it relies on, while simultaneously figuring out how to affordably serve their more expensive AI models. Anthropic's recently launched AI coding tool Claude Code has been a hit with enterprises, reportedly boosting the company's ARR to $4 billion, and likely taking some users from Cursor in the process. Last week, Cursor returned the favor by recruiting two Anthropic employees that led product development of Claude Code. But if Cursor intends to keep its market-leading position, it can't stop working with the state-of-the-art model providers -- at least, not until its own home-grown models are more reasonably competitive. So Anysphere recently struck multi-year deals with OpenAI, Anthropic, Google, and xAI to offer a $200-a-month Cursor Ultra plan with very high rate limits. Anthropic co-founder Jared Kaplan also told TechCrunch in June he plans to work with Cursor for a long time. However, it certainly feels as if the pressure between Cursor and AI model developers is building.

The $20 AI trap Cursor didn't warn you about

Anysphere, the company behind the Cursor AI coding environment, issued an apology Friday regarding a poorly communicated pricing adjustment to its $20-per-month Pro plan, which led to unexpected costs for some users. Michael Truell, CEO of Anysphere, stated in a blog post, "We recognize that we didn't handle this pricing rollout well and we're sorry. Our communication was not clear enough and came as a surprise to many of you." This statement refers to a June 16 update for Cursor's Pro plan. Previously, the plan offered 500 fast responses using advanced AI models from OpenAI, Anthropic, and Google, followed by unlimited responses at a slower speed. Under the revised plan, subscribers now receive $20 worth of usage per month, billed at API rates. This new structure permits users to execute coding tasks within Cursor using their preferred AI model until the $20 limit is reached, after which additional credits must be purchased for continued use. Following the announcement, Pro users voiced complaints on social media platforms. Many reported exhausting their allocated requests rapidly under the new plan, sometimes after initiating only a few prompts, particularly when utilizing Anthropic's Claude models, which are frequently employed for coding tasks. Other users claimed they incurred unanticipated additional charges due to not fully comprehending that exceeding the $20 usage limit would result in extra fees if a spending cap had not been established. The updated plan only offers unlimited usage for Pro users through Cursor's "auto mode," which automatically routes requests to AI models based on available capacity. Anysphere has stated its intention to refund users who were unexpectedly charged and aims to enhance clarity regarding future pricing modifications. Truell noted in the blog post that Anysphere revised Cursor's pricing because "new models can spend more tokens per request on longer-horizon tasks." This indicates that certain contemporary AI models have become more expensive due to their consumption of significant computational resources and time to complete intricate, multi-step tasks. Cursor had absorbed these expenses under its previous Pro plan but is now transferring these costs to its users. While the cost of many AI models has decreased, the expense associated with cutting-edge performance remains substantial, in some instances exceeding previous levels. Anthropic's recently introduced Claude Opus 4 model is priced at $15 per million input tokens, which equates to approximately 750,000 words, a length surpassing the entire "Lord of The Rings" series. Output tokens for the model are priced at $75 per million. This pricing structure is even higher than Google's Gemini 2.5 Pro, which was launched in April and represented its most expensive AI model at the time. In recent months, OpenAI and Anthropic have also initiated charges for "priority" access to AI models for enterprise customers. This represents an additional premium beyond standard AI model costs, ensuring reliable and high-speed performance. Cursor launches web app for coding agents These increasing expenses appear to be influencing the pricing of AI coding tools across the industry. Users of Replit, another widely used AI tool, also encountered unexpected pricing changes recently, which increased the cost of completing large tasks with AI assistance. Cursor has achieved significant market success, reaching over $500 million in Annual Recurring Revenue (ARR) primarily through subscriptions to its Pro plan. However, Cursor currently faces considerable competition from the very AI providers it relies upon, while simultaneously seeking methods to affordably integrate their more expensive AI models. Anthropic's recently released AI coding tool, Claude Code, has gained traction among enterprises, contributing to a reported increase in Anthropic's ARR to $4 billion and potentially drawing users away from Cursor. Last week, Cursor recruited two Anthropic employees who were instrumental in the product development of Claude Code. For Cursor to maintain its leading market position, continued collaboration with state-of-the-art model providers is necessary, at least until its own internally developed models achieve competitive viability. Consequently, Anysphere recently finalized multi-year agreements with OpenAI, Anthropic, Google, and xAI to introduce a $200-a-month Cursor Ultra plan, which offers very high rate limits. Jared Kaplan, co-founder of Anthropic, confirmed to TechCrunch in June his intention to maintain a long-term working relationship with Cursor.