Key Takeaways
- Cursor is a commercial, VS Code-based AI-first code editor made by Anysphere Inc., founded 2022 by four MIT students
- No official local-model support — custom API keys are documented only for OpenAI, Anthropic, Google, Azure OpenAI, and AWS Bedrock
- Tab autocomplete always runs on Cursor's own cloud backend, regardless of configuration
- A community workaround can point Chat at a local server via a custom API base URL, but this is unsupported and unofficial, and does not cover Tab autocomplete
- "Privacy Mode" prevents code from being used for training or long-term retention, but code is still transmitted to Cursor's (and the model provider's) servers for processing
- Anysphere Inc. was acquired by SpaceX in an all-stock deal reportedly worth $60 billion, closing August 14, 2026, confirmed by an SEC Form 8-K filing and named reporting from CBS News, Bloomberg, and CNBC
📍 In One Sentence
Cursor, made by Anysphere Inc., has no official local-model feature — only cloud providers are officially supported for custom API keys, Tab autocomplete always stays on Cursor's cloud backend, and "Privacy Mode" stops training/retention but not transmission to Cursor's servers — and Anysphere itself was acquired by SpaceX for a reported $60 billion in an all-stock deal that closed August 14, 2026, confirmed via SEC filing.
💬 In Plain Terms
If you searched for "Cursor local mode" hoping to run Cursor entirely offline with your own local AI model like Ollama, the honest answer is: officially, you can't. Cursor is built around cloud AI models, and only a few features can be pointed at a local server through an unsupported workaround — autocomplete never goes local no matter what you configure. Separately, in a genuinely wild but confirmed 2026 development, SpaceX (yes, the rocket company) bought Cursor's parent company, Anysphere, for $60 billion in stock.
📌Note: This review is based on Cursor's own documentation and pricing pages, an SEC Form 8-K filing, and named reporting from CBS News, Bloomberg, and CNBC. It does not claim PromptQuorum has run hands-on benchmarks of Cursor, and it flags every detail it could not independently confirm.
What Is Cursor?
Cursor is a commercial, standalone, VS Code-based AI-first code editor made by Anysphere Inc., founded in 2022 by four MIT students — Michael Truell (CEO), Sualeh Asif, Aman Sanger, and Arvid Lunnemark.
- Product type: a standalone code editor (VS Code fork), not an extension
- Company: Anysphere Inc., founded 2022 by Michael Truell, Sualeh Asif, Aman Sanger, and Arvid Lunnemark
- Funding: a Series C reportedly raising Anysphere to a $9.9 billion valuation around May 2025, followed by a Series D raising $2.3 billion at a $29.3 billion valuation on November 13, 2025
- Licensing: proprietary, closed-source
- Ownership as of this review: acquired by SpaceX in August 2026 (see "The SpaceX Acquisition" section below)
Does Cursor Support Local Models?
No — Cursor has no first-party, officially supported local-model feature. Cursor's own documentation states that custom API keys "only work with chat models," and officially lists only cloud providers: OpenAI, Anthropic, Google, Azure OpenAI, and AWS Bedrock.
- Official position: Cursor's help documentation does not name Ollama, LM Studio, or any local/self-hosted endpoint as a supported custom-API-key provider
- Tab autocomplete: per Cursor's own documentation, "Tab completion continues using Cursor's built-in models" no matter what custom API key or endpoint is configured — it never runs locally
- Community workaround: independent guides describe overriding the "OpenAI API Base URL" setting to point at a local OpenAI-compatible server (for example,
http://localhost:11434/v1for Ollama), using any non-empty placeholder API key — this can reportedly work for Chat and Cmd+K - Agent mode: whether Agent mode fully honors a local base-URL override is not clearly confirmed by Cursor's own documentation — this review could not verify it beyond a single secondary source
What Does Cursor's "Privacy Mode" Actually Do?
Privacy Mode stops your code from being used for AI model training or long-term retention — it does not stop your code from being sent to Cursor's servers for processing. Per Cursor's own security and privacy documentation: "Privacy Mode ensures your code is never used for training by Cursor or other AI model providers."
- Default state: opt-in for individual/Pro users (a toggle in Settings); on by default for Enterprise teams, where admins can force it organization-wide
- What it covers: training and data retention by Cursor and its model providers
- What it does not cover: transmission — your code is still sent to Cursor's servers and to whichever model provider is processing your request, even with Privacy Mode enabled
- Zero-data-retention (ZDR) agreements with model providers back Privacy Mode's no-training claim — but Cursor's own materials note that ZDR does not apply if you supply your own API key, in which case your data handling follows that provider's own privacy policy instead
- Cursor states it is SOC 2 Type II certified, per its Enterprise marketing page
The SpaceX Acquisition of Anysphere, Explained
SpaceX acquired Anysphere Inc., the maker of Cursor, in an all-stock deal reportedly worth $60 billion, closing August 14, 2026 — confirmed by an SEC Form 8-K filing from Space Exploration Technologies Corp. and named reporting from CBS News, Bloomberg, and CNBC.
- Background: SpaceX merged with xAI in February 2026 and went public on Nasdaq under the ticker SPCX in June 2026
- April 21, 2026: SpaceX reportedly announced acquisition rights over Anysphere
- June 16, 2026: the purchase option was exercised and publicly disclosed; Cursor CEO Michael Truell was quoted confirming the deal in CBS News reporting
- August 14, 2026: the acquisition closed, an all-stock deal reportedly worth $60 billion, with roughly 391 million SpaceX Class A shares issued, per Bloomberg's reporting on the SEC filing
- Reported branding: the combined entity has been referred to as "SpaceXAI" in press coverage
Platform, Pricing, and Licensing
Platform
- What Cursor states:
- A standalone, VS Code-based desktop editor for Mac, Windows, and Linux.
Hobby tier
- What Cursor states:
- Free, with limited Agent requests and no credit card required, per cursor.com/pricing.
Pro tier
- What Cursor states:
- $20/month, per cursor.com/pricing. Higher Pro+ and Ultra tiers also exist above Pro (Ultra offering substantially higher agent-request limits); this review could not cleanly confirm their exact current dollar prices from a single fetch — verify directly on cursor.com/pricing.
Teams tier
- What Cursor states:
- $40/user/month for Standard/Premium tiers, including Privacy Mode by default and SSO, per cursor.com/pricing.
Enterprise
- What Cursor states:
- Custom pricing.
Licensing
- What Cursor states:
- Proprietary, closed-source.
Ownership
- What Cursor states:
- Anysphere Inc. was acquired by SpaceX, closing August 14, 2026, confirmed via SEC filing.
Verify current Pro+/Ultra exact pricing directly on cursor.com/pricing, since this review could not cleanly confirm those two specific figures from a single page fetch.
Download Cursor
Cursor is free to download; paid usage tiers apply once you exceed the free Hobby tier's limits.
Source | Link |
|---|---|
| Official site (download) | cursor.com |
| Pricing | cursor.com/pricing |
| Security and privacy documentation | cursor.com/help/security-and-privacy/privacy |
If your goal is specifically local-model use, read the "Does Cursor Support Local Models?" section above before downloading — Cursor is not built local-first.
Who Should Use Cursor's Local Workaround?
The unofficial local-model workaround fits a narrow set of users; most people who specifically need local models should choose a local-first tool instead.
What Cursor Is Not Good For
Cursor is not a good fit if genuine local-model inference, air-gapped operation, or open-source auditability is a requirement.
- Not for genuine local-model use — there is no official local-model feature, and autocomplete never runs locally under any configuration
- Not for air-gapped or offline environments — AI features require an internet connection
- Not open source — Cursor is a proprietary, closed-source product
- Not free at meaningful usage volume — the Hobby tier has limited Agent requests; regular use requires the $20/month Pro tier or higher
- Not guaranteed to have transmission-level privacy — Privacy Mode stops training/retention, but code is still sent to Cursor's and the model provider's servers for processing, and secrets in files not excluded via
.cursorignorecan still be transmitted
Common Mistakes When Evaluating Cursor's Privacy Claims
Most confusion about Cursor and local models comes from conflating "no training" with "no data transmission," or assuming Cursor works like a local-first tool.
Competitors and Alternatives
For genuine local-model support, Cursor is most often compared unfavorably to Cline, Tabby, and the now-discontinued Continue.dev — all built local-first, unlike Cursor.
Tool | Best known for | Link |
|---|---|---|
| Cline | Open-source, autonomous agent extension with real local-model support via Ollama/LM Studio | Cline review |
| Tabby | Self-hosted, open-source AI coding assistant, built local-first | Tabby review |
| Continue.dev | Open-source, model-agnostic extension with real local-model support (discontinued, acquired by Cursor 2026) | Continue.dev review |
| Windsurf / Devin Desktop | Another cloud-based AI-first editor, acquired by Cognition AI, rebranded June 2026 | Windsurf review |
Note the irony: Cursor itself acquired Continue.dev (a genuinely local-model-capable tool) in June 2026 and discontinued it, shortly before Cursor's own parent company was acquired by SpaceX in August 2026.
Frequently Asked Questions
Does Cursor support local models like Ollama?
Not officially. Cursor's documentation only lists cloud providers for custom API keys. A community workaround can point Chat at a local server, but it is unsupported, and Tab autocomplete never runs locally regardless of configuration.
What does Cursor's Privacy Mode actually do?
It prevents your code from being used for AI training or long-term retention by Cursor or its model providers. It does not stop your code from being transmitted to Cursor's servers for processing.
Can Cursor work fully offline?
No. AI features (chat, agent, tab autocomplete) require an internet connection. Only basic editing and Git operations work offline.
Who owns Cursor now?
Cursor's maker, Anysphere Inc., was acquired by SpaceX in an all-stock deal reportedly worth $60 billion, closing August 14, 2026, confirmed via an SEC Form 8-K filing.
Who founded Cursor?
Anysphere Inc. was founded in 2022 by four MIT students: Michael Truell (CEO), Sualeh Asif, Aman Sanger, and Arvid Lunnemark.
How much does Cursor cost?
A free Hobby tier exists with limited Agent requests. The Pro tier costs $20/month, with higher Pro+ and Ultra tiers above it. Teams tiers cost $40/user/month.
Is Cursor open source?
No, Cursor is a proprietary, closed-source product.
Does Cursor support MCP (Model Context Protocol)?
Yes, officially, per cursor.com/docs/mcp — Agent can call MCP tools, configured via a project-level .cursor/mcp.json file, currently capped at 40 tools.
Did Cursor acquire Continue.dev?
Yes — see PromptQuorum's Continue.dev review for the sourced details. Cursor acquired Continue Dev, Inc. in June 2026, and Continue.dev subsequently stopped active development — an ironic detail given Continue.dev genuinely supported local models, which Cursor itself does not officially do.
Has PromptQuorum independently tested Cursor's claims?
This review is based on Cursor's own documentation and pricing pages, an SEC Form 8-K filing, and named reporting from CBS News, Bloomberg, and CNBC, rather than hands-on benchmarking by PromptQuorum.