Lesson 2. Installing and configuring Cursor AI — complete guide

Topic breakdown

Cursor is an AI-native code editor built on top of VS Code. Created by Anysphere and released in 2023. By 2026, Cursor became the most popular AI editor in the world, valued at $50 billion.

How Cursor differs from VS Code: in regular VS Code, you can install the Copilot plugin, but it is just an assistant. Cursor has built the entire editor around AI — Tab completion, Inline Edit, Chat, and Agent mode are built-in. It indexes all project files and understands context.

Installation is very simple: download from cursor.com (Windows .exe, Mac .dmg, Linux .AppImage), install, and upon opening you'll see an interface similar to VS Code. If you previously used VS Code, all extensions, themes, and shortcuts will import automatically.

Cursor's free plan (Hobby) provides 2000 AI completions and 50 slow premium requests per month. For starting and learning, this is completely sufficient. The Pro plan ($20/month) unlocks unlimited completions and fast premium models.

What you'll learn

• Install Cursor AI on your computer
• Know the interface elements — sidebar, terminal, chat panel
• Understand how to transition from VS Code to Cursor
• Open your first project folder and start chatting with the AI
• Know the difference between the free and paid plans
• Configure Cursor to suit your needs

Deep dive

The Cursor interface looks almost identical to VS Code, but there are important differences. The main one is the AI Chat panel on the right (Cmd+L). Through this, you communicate with the AI about your project. The AI sees all open files, the project structure, and even terminal output.

Another strength of Cursor is Tab completion. It's not standard autocomplete; it's an AI that understands the context of your code and suggests entire lines or blocks. You simply press Tab to accept the suggestion. This speeds up traditional programming by 3-5 times.

Privacy and Security: In Settings > Privacy, you can enable Privacy Mode — in this mode, your code is not used to train AI models. This is important for commercial projects. Privacy Mode works on the free plan too.

Choosing a model: Cursor works with multiple AI models — GPT-4o, Claude 3.5 Sonnet, and others. In Settings > Models, you can choose the default model. For beginners, the default setting (Auto) is best — Cursor chooses the optimal model for the task itself.

Why it works

Common mistakes

• Using VS Code and Cursor at the same time — they can conflict, choose one
• Misunderstanding the free plan — 2000 completions are enough, but don't waste them on useless prompts
• Not changing settings — turning on Privacy mode and choosing a model are important settings
• Working without an open folder — Cursor indexes the project folder when opened, this is crucial

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