Understanding the new Cursor AI coding agent pricing model

The new two-pool system

Cursor changed its Teams pricing in June 2026. This update splits usage into two distinct pools. The first pool covers first-party models like Grok 4.6 and Composer 2.5. The second pool covers third-party frontier models from Anthropic, OpenAI, and Google. Standard Teams seats cost $40 per user per month. This price drops to $32 with annual billing. Premium seats cost $120 per user per month. This price drops to $96 with annual billing. This Premium tier provides 5x the usage of the Standard seat for 3x the cost. The company expects this change to lower costs for 90% of teams.

The June 2026 Teams update introduced separate usage pools for Composer and Auto models versus third-party API models, which aims to provide much more headroom for developers at the same price point.

I find the expansion of usage headroom logical. SpaceX acquired Anysphere in June 2026 for $60 billion in stock. This acquisition followed a period where the company struggled to price its own products profitably. The company’s gross margin sat at negative 23% in the quarter ended January 2026. Cursor’s revenue reached $4 billion annualized in 2026.

Pricing volatility defined the company in 2025. On June 16, 2025, Cursor moved from a 500-request monthly cap to a usage-based credit model. This shift caused massive frustration. Developers who never thought about tokens hit their limits in hours. Some woke up to surprise bills in the hundreds. CEO Michael Truell apologized on July 4, 2025. The company offered refunds for surprise usage occurring between June 16 and July 4, 2025.

Managing credits and the router

Every paid plan includes a monthly usage allowance. This allowance measures what the underlying models actually cost. The Pro plan includes $20 of third-party usage. The Pro+ plan includes $70. The Ultra plan includes $400. Users can enable on-demand usage if they exhaust these pools. This prevents the sudden stops that frustrated users in 2025.

The Router replaced the old Auto mode in July 2026. Auto Cost uses flat rates per million tokens. It charges $1.25 for input, $1.25 for cache writes, $0.25 for cache reads, and $6 for output.

Budgeting matters. The dashboard shows how close you sit to each limit. Bugbot no longer costs a $40 seat subscription. It now bills at roughly $1.00 to $1.50 per run. Bugbot runs on every commit push instead of once per pull request. Bugbot availability covers four levels: Free, Pro, Teams, and Enterprise.

Will the two-pool design eventually necessitate higher base subscriptions for heavy users?

Max mode exists only on legacy request-based plans. It bills at the model’s API rate plus 20%. If you signed up recently, you do not have it.

The India-only Start plan launched on July 28, 2026. It costs ₹649 per month. This plan covers the Cursor models pool. It includes Grok 4.6, Grok 4.5, and Composer 2.5. It excludes third-party model pools, on-demand usage, Bugbot, Auto, and Automations.

The plan ladder

The plan hierarchy scales with usage intensity. Individual users choose between Hobby, Pro, Pro+, and Ultra.

The Pro plan costs $20. The Pro+ plan costs $60. The Ultra plan costs $200. You should watch your usage dashboard constantly. The Hobby plan costs nothing.

The Pro plan provides unlimited Tab completions. It also includes extended Agent limits and cloud agents. I suggest you use the Pro plan for real workflows.

The Pro+ plan provides 3x the usage of the Pro plan. It does not add new features.

The Ultra plan provides 20x the usage of the Pro plan. It includes priority access to new features.

The Teams Standard plan costs $40 per seat. It includes centralized billing and SSO.

The Teams Premium plan costs $120 per seat. It targets power users.

The student discount closed to new signups on June 25, 2026. This offer previously gave a full year of Pro for free.