I have absolutely no horse in this race, but I turned from a 100% Cursor user at the beginning of the year, to one that basically uses agents for 90% of my work, and VS Code for the rest of it. The value proposition that Cursor gave me was not able to compete with what the basic Max subscription on anthropic gave me, and VS Code is still a superior experience to Claude in the IDE space.
I think though that Cursor has all the potential to beat Microsoft at the IDE game if they focus on it. But I would say it's by no way a given that this is the default outcome.