Cursor, an AI-powered code editor, faced backlash after a developer noticed that switching between devices led to unexpected logouts.

When the user contacted support, the AI agent, “Sam,” falsely claimed that this was due to a new policy, which led to frustration and multiple subscription cancellations.

The issue was traced back to a technical bug and a confabulation by the AI model, which invented a non-existent policy.

Cursor later apologized and clarified that AI responses are now clearly labeled, ArsTechnica has reported.

This incident highlights the risks of using AI in customer support without proper safeguards, as it caused confusion and potential business damage.

Written by B.C. Begley