by Amit Shekhar · 22 July 2026
How does Cursor work?
How Cursor works. We will also see what Cursor is, why it is a code editor with an AI brain on top, how it indexes our codebase into embeddings and searches it by meaning, how Tab autocomplete, Chat, and Agent mode work, how Cursor applies changes through a diff, why it uses different models for different jobs, and how it tries to keep our code private.
Read on Outcome School ↗then come back to lock it in
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What this article covers
- What is Cursor?
- Cursor = Code Editor + AI
- The big idea behind Cursor
- How does Cursor understand our code?
- How does Cursor index our codebase?
- How does Tab autocomplete work?
- How does the Chat work?
- How does the Agent mode work?
- How does Cursor apply the changes?
- Why does Cursor use different models?
- How does Cursor keep our code private?
- The complete flow of Cursor
The article lives on outcomeschool.com. Read it there, then come back: the tutor in the margin has read it and will answer questions, and the questions below check what stayed.