Company apologizes after AI support agent invents policy that causes user uproar

On Monday, a developer using the popular AI-powered code editor Cursor noticed something strange: Switching between machines instantly logged them out, breaking a common workflow for programmers who use multiple devices. When the user contacted Cursor support, an agent named "Sam" told them it was expected behavior under a new policy. But no such policy existed, and Sam was a bot. The AI model made the policy up, sparking a wave of complaints and cancellation threats documented on Hacker News and Reddit.

This marks the latest instance of AI confabulations (also called "hallucinations") causing potential business damage. Confabulations are a type of "creative gap-filling" response where AI models invent plausible-sounding but false information. Instead of admitting uncertainty, AI models often prioritize creating plausible, confident responses, even when that means manufacturing information from scratch.

For companies deploying these systems in customer-facing roles without human oversight, the consequences can be immediate and costly: frustrated customers, damaged trust, and, in Cursor's case, potentially canceled subscriptions.

How it unfolded

The incident began when a Reddit user named BrokenToasterOven noticed that while swapping between a desktop, laptop, and a remote dev box, Cursor sessions were unexpectedly terminated.

"Logging into Cursor on one machine immediately invalidates the session on any other machine," BrokenToasterOven wrote in a message that was later deleted by r/cursor moderators. "This is a significant UX regression."

Confused and frustrated, the user wrote an email to Cursor support and quickly received a reply from Sam: "Cursor is designed to work with one device per subscription as a core security feature," read the email reply. The response sounded definitive and official, and the user did not suspect that Sam was not human.

After the initial Reddit post, users took the post as official confirmation of an actual policy change—one that broke habits essential to many programmers' daily routines. "Multi-device workflows are table stakes for devs," wrote one user.

Shortly afterward, several users publicly announced their subscription cancellations on Reddit, citing the non-existent policy as their reason. "I literally just cancelled my sub," wrote the original Reddit poster, adding that their workplace was now "purging it completely." Others joined in: "Yep, I'm canceling as well, this is asinine." Soon after, moderators locked the Reddit thread and removed the original post.