What is Cursor, and how is it different from VS Code with Copilot?

What is Cursor?

Cursor's documentation describes it as "a coding agent for building ambitious software." In practice it is a desktop editor: you open a folder, and an Agent panel (Cmd+I on a Mac) can explain the code, plan a change, edit files and run commands, according to its quickstart. Cursor's terms name the maker as Anysphere, Inc., and the software is proprietary, which the CodeLifter agents ledger checked on 15 October 2026.

The editor itself will look familiar. Cursor's VS Code migration guide says "Cursor is based upon the VS Code codebase", and its help pages say it "shares the same default shortcuts as VS Code." An agent, in this context, is an AI model that chooses its own steps and uses tools such as file edits and terminal commands in a loop; the AI agent explainer covers that in detail.

What is VS Code with Copilot?

Visual Studio Code is Microsoft's free code editor. GitHub Copilot is GitHub's AI service that plugs into it. VS Code's Copilot setup guide, read on 16 October 2026, says you need "access to GitHub Copilot with your GitHub account", and that "without a plan, signing in enrolls an eligible account in Copilot Free." Its AI overview lists the features: agents that work across files and run tests, chat, inline chat for focused edits, and inline suggestions while you type. VS Code can also run other agent harnesses, such as Claude and Codex, and accept your own model key for chat.

How do they compare?

Everything below comes from each vendor's documentation read on 16 October 2026, plus the CodeLifter agents ledger of 15 October. Both change often.

	Cursor	VS Code with Copilot
Maker	Anysphere	Microsoft (editor), GitHub (Copilot)
What you install	One app, the Cursor editor	VS Code, then sign in to Copilot
Extension source	Open VSX registry, through Cursor's own proxy	Microsoft's VS Code Marketplace
Account	Cursor plan, sold as part of "The X Subscription"	GitHub account with a Copilot plan, including Copilot Free
Models	Cursor's own (Grok 4.7, 4.6, 4.5, Composer 2.5); Claude, GPT and Gemini on Premium and above	Models from Anthropic, OpenAI, Google and xAI, depending on plan
Rules files	.cursor/rules/*.mdc and AGENTS.md	.github/copilot-instructions.md and AGENTS.md
MCP servers	Yes, each tool call approved by default	Yes, behind a workspace or per-server trust decision
Default guard	Terminal commands need approval; file edits in the workspace do not	Permission levels from per-call approval to Autopilot; OS-level sandboxing for terminal commands

Where do they really differ?

Extensions. Cursor's extensions page says it uses "the Open VSX extension registry, not the VS Code Marketplace," and that "not every Microsoft Marketplace extension is listed there." It also warns that the same publisher.extension name "can point to different publishers or code on Open VSX than on the Microsoft Marketplace", so check the publisher before you install. Cursor routes downloads through its own proxy, which runs malware and supply-chain checks before an extension is offered.

Who sells the AI, and which models. Cursor's Models and Pricing page says Cursor "is sold as part of The X Subscription, one subscription for Grok, Cursor, and X." Its included usage covers Cursor's own models; third-party models such as Claude, GPT and Gemini "aren't part of the included pool" and are billed at API list price on Premium and above. Copilot, by contrast, offers models from several companies inside the plan, with the choice depending on the tier; on Copilot Free models come through automatic selection only, as the coding agents thread notes.

How agents are fenced in. Cursor's agent security page says reading files needs no approval, "Agents can modify workspace files without approval, except for configuration files", and "By default, terminal commands need your approval." It also says Cursor supports VS Code's workspace trust "but it's disabled by default." VS Code's trust and safety page describes agent sandboxing, which "uses operating system-level isolation to restrict what terminal commands can access", and says an untrusted workspace runs in restricted mode, "which also disables agents." Whichever you use, commit before a task so every agent edit shows in git diff.

Can you move from VS Code to Cursor without losing your setup?

Mostly. Cursor's migration guide gives a one-click import:

1. In Cursor, open Cursor Settings with Cmd+Shift+J (Ctrl+Shift+J on Windows and Linux).
2. Go to General, then Account.
3. Under VS Code Import, click Import. This brings over extensions, themes, settings and keybindings.
4. Check the Extensions panel for anything that did not arrive; an extension missing from Open VSX will not install.
5. Copy your project rules into AGENTS.md so both editors, and other agents, read the same instructions. The AGENTS.md thread covers what to put in it.

Cursor's help page confirms you can keep both: "They run as separate applications and you can use both on the same projects." If you also want a terminal agent alongside either editor, the Claude Code setup thread walks through one install, and the CodeLifter agents directory lists twelve agents with their rules files and licences.

Short version

• Cursor is Anysphere's proprietary editor built on the VS Code codebase, with its agent built in.
• VS Code with Copilot is Microsoft's editor plus GitHub's AI service, with a free tier.
• Cursor gets extensions from Open VSX; VS Code uses Microsoft's marketplace.
• Cursor's plans centre on its own models; Copilot offers several companies' models by plan.
• Both read AGENTS.md, both support MCP, and both need you to review agent edits.