Better Offline Monologue: Is Anthropic Killing Cursor?
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Jul 10, 2025 In a thought-provoking monologue, the host highlights how new pricing changes from Anthropic are affecting its biggest client, Cursor. This shift showcases the emergence of the Subprime AI Crisis. The discussion dives into user backlash over rising costs and concerns about service quality. Furthermore, financial struggles facing generative AI companies are examined, emphasizing the urgent need for sustainable monetization to avoid industry decline.
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Cursor's Explosive Growth Model
- Cursor reached $500 million annual recurring revenue by letting users spend more than they paid for.
- This growth was driven by unrestricted access to multiple AI models, attracting both engineers and casual users.
Cursor's Pricing Overhaul Problems
- Cursor introduced a confusing and expensive $200/month 'ultra' plan and new pricing tiers.
- These changes heavily rate-limited users on premium models and degraded service quality.
Shitification Hits AI Startups
- Cursor's pricing shift is a classic example of 'shitification': offering high quality to attract users, then degrading service to maximize profit.
- This approach fails when AI compute costs are too high, making it hard to keep the product both essential and profitable.