Reality is that Claude Code is very powerful and people are happily paying $200 per month for it and would probably pay a lot more. Cursor isn’t really a huge factor in this. Claude isn’t going to go bankrupt they can just raise prices.

Their real fear should be that Google has a signficant cost edge in AI inference and will be able to offer Gemini CLI at a much cheaper rate than they will even if Gemini CLI isn’t quite as good.