On Monday, a developer utilizing the favored AI-powered code editor Cursor seen one thing unusual: Switching between machines immediately logged them out, breaking a standard workflow for programmers who use a number of gadgets. When the consumer contacted Cursor help, an agent named “Sam” informed them it was anticipated habits underneath a brand new coverage. However no such coverage existed, and Sam was a bot. The AI mannequin made the coverage up, sparking a wave of complaints and cancellation threats documented on Hacker Information and Reddit.
This marks the newest occasion of AI confabulations (additionally referred to as “hallucinations”) inflicting potential enterprise harm. Confabulations are a sort of “inventive gap-filling” response the place AI fashions invent plausible-sounding however false info. As an alternative of admitting uncertainty, AI fashions typically prioritize creating believable, assured responses, even when which means manufacturing info from scratch.
For firms deploying these techniques in customer-facing roles with out human oversight, the results could be speedy and expensive: annoyed prospects, broken belief, and, in Cursor’s case, probably canceled subscriptions.
How It Unfolded
The incident started when a Reddit consumer named BrokenToasterOven seen that whereas swapping between a desktop, laptop computer, and a distant dev field, Cursor classes have been unexpectedly terminated.
“Logging into Cursor on one machine instantly invalidates the session on some other machine,” BrokenToasterOven wrote in a message that was later deleted by r/cursor moderators. “This can be a vital UX regression.”
Confused and annoyed, the consumer wrote an e-mail to Cursor help and rapidly acquired a reply from Sam: “Cursor is designed to work with one machine per subscription as a core safety characteristic,” learn the e-mail reply. The response sounded definitive and official, and the consumer didn’t suspect that Sam was not human.
After the preliminary Reddit submit, customers took the submit as official affirmation of an precise coverage change—one which broke habits important to many programmers’ day by day routines. “Multi-device workflows are desk stakes for devs,” wrote one consumer.
Shortly afterward, a number of customers publicly introduced their subscription cancellations on Reddit, citing the non-existent coverage as their cause. “I actually simply cancelled my sub,” wrote the unique Reddit poster, including that their office was now “purging it utterly.” Others joined in: “Yep, I am canceling as effectively, that is asinine.” Quickly after, moderators locked the Reddit thread and eliminated the unique submit.
“Hey! We’ve no such coverage,” wrote a Cursor consultant in a Reddit reply three hours later. “You are after all free to make use of Cursor on a number of machines. Sadly, that is an incorrect response from a front-line AI help bot.”
AI Confabulations as a Enterprise Danger
The Cursor debacle remembers a comparable episode from February 2024 when Air Canada was ordered to honor a refund coverage invented by its personal chatbot. In that incident, Jake Moffatt contacted Air Canada’s help after his grandmother died, and the airline’s AI agent incorrectly informed him he might e-book a regular-priced flight and apply for bereavement charges retroactively. When Air Canada later denied his refund request, the corporate argued that “the chatbot is a separate authorized entity that’s accountable for its personal actions.” A Canadian tribunal rejected this protection, ruling that firms are accountable for info supplied by their AI instruments.
Slightly than disputing duty as Air Canada had performed, Cursor acknowledged the error and took steps to make amends. Cursor cofounder Michael Truell later apologized on Hacker Information for the confusion in regards to the non-existent coverage, explaining that the consumer had been refunded and the difficulty resulted from a backend change meant to enhance session safety that unintentionally created session invalidation issues for some customers.
“Any AI responses used for e-mail help are actually clearly labeled as such,” he added. “We use AI-assisted responses as the primary filter for e-mail help.”
Nonetheless, the incident raised lingering questions on disclosure amongst customers, since many individuals who interacted with Sam apparently believed it was human. “LLMs pretending to be folks (you named it Sam!) and never labeled as such is clearly meant to be misleading,” one consumer wrote on Hacker Information.
Whereas Cursor fastened the technical bug, the episode reveals the dangers of deploying AI fashions in customer-facing roles with out correct safeguards and transparency. For a corporation promoting AI productiveness instruments to builders, having its personal AI help system invent a coverage that alienated its core customers represents a very awkward self-inflicted wound.
“There’s a specific amount of irony that individuals strive actually arduous to say that hallucinations should not a giant drawback anymore,” one consumer wrote on Hacker Information, “after which an organization that may profit from that narrative will get instantly harm by it.”
This story initially appeared on Ars Technica.
