[Bug] Jupyter Notebooks & AI Panel broken after upgrading to Cursor 3

Where does the bug appear (feature/product)?

Cursor IDE

Describe the Bug

Hi Cursor Team,
I recently upgraded to Cursor 3 (latest version), and immediately after the update, I started experiencing critical issues with core features.
The Problem:
Jupyter Notebooks: I am unable to open any .ipynb files. When I click on them, nothing happens (or the tab remains blank/loading).
AI Panel: The AI functionality is completely broken. The panel shows an error message stating: Request ID: 4806b8f1-9ee4-40ef-83a8-0221a90f17d9
{“error”:“ERROR_CUSTOM”,“details”:{“title”:“Agent Execution Timed Out”,“detail”:“The agent execution provider did not respond in time. This may indicate the extension host is not running or is unresponsive.”,“isRetryable”:false,“shouldShowImmediateError”:true,“additionalInfo”:{},“buttons”:[{“label”:“Reload Window”,“reloadWindow”:{}}],“planChoices”:}}
Agent Execution Timed Out [deadline_exceeded]
ConnectError: [deadline_exceeded] Agent Execution Timed Out
at vscode-file://vscode-app/c:/Program%20Files/cursor/resources/app/out/vs/workbench/workbench.desktop.main.js:53345:23460
at async fg_.createExecInstance (vscode-file://vscode-app/c:/Program%20Files/cursor/resources/app/out/vs/workbench/workbench.desktop.main.js:53345:20015)
at async mqy (vscode-file://vscode-app/c:/Program%20Files/cursor/resources/app/out/vs/workbench/workbench.desktop.main.js:43738:623141)
at async $4.execute (vscode-file://vscode-app/c:/Program%20Files/cursor/resources/app/out/vs/workbench/workbench.desktop.main.js:43959:14688)
at async Khd.execute (vscode-file://vscode-app/c:/Program%20Files/cursor/resources/app/out/vs/workbench/workbench.desktop.main.js:53345:1749)
at async wK_.execute (vscode-file://vscode-app/c:/Program%20Files/cursor/resources/app/out/vs/workbench/workbench.desktop.main.js:56367:4966)
at async k0d.buildComposerRequestContext (vscode-file://vscode-app/c:/Program%20Files/cursor/resources/app/out/vs/workbench/workbench.desktop.main.js:56377:4190)
at async k0d.streamFromAgentBackend (vscode-file://vscode-app/c:/Program%20Files/cursor/resources/app/out/vs/workbench/workbench.desktop.main.js:56377:6906)
at async k0d.getAgentStreamResponse (vscode-file://vscode-app/c:/Program%20Files/cursor/resources/app/out/vs/workbench/workbench.desktop.main.js:56377:17325)
at async XOe.submitChatMaybeAbortCurrent (vscode-file://vscode-app/c:/Program%20Files/cursor/resources/app/out/vs/workbench/workbench.desktop.main.js:44075:19892)
at async Gl (vscode-file://vscode-app/c:/Program%20Files/cursor/resources/app/out/vs/workbench/workbench.desktop.main.js:55360:4891)

Steps to Reproduce

open cursor

Operating System

Windows 10/11

Version Information

Version: 3.0.16 (system setup)
VSCode Version: 1.105.1
Commit: 475871d112608994deb2e3065dfb7c6b0baa0c50
Date: 2026-04-09T05:33:51.767Z
Layout: editor
Build Type: Stable
Release Track: Default
Electron: 39.8.1
Chromium: 142.0.7444.265
Node.js: 22.22.1
V8: 14.2.231.22-electron.0
OS: Windows_NT x64 10.0.26100

Does this stop you from using Cursor

Yes - Cursor is unusable

I tried cursor --disable-extensions , not work

Hey, thanks for the report. From the screenshots it looks like the extension host isn’t starting at all. The notebook is empty, and the AI panel gets stuck on “Waiting for extension host” and then times out. The project is simple too, so it doesn’t look like a load issue.

Since --disable-extensions didn’t help, try this:

  • Clear the cache: close Cursor, delete %APPDATA%\Cursor\CachedExtensions and %APPDATA%\Cursor\CachedExtensionVSIXs, then start Cursor again.
  • Reset user data: close Cursor, rename %APPDATA%\Cursor to Cursor_backup, then start Cursor. It’ll create a fresh profile. If it works, something in the old settings or extensions is conflicting.
  • If nothing helps, roll back to version 2.6.22 so you can at least unblock work.

Also, please send logs from Help > Toggle Developer Tools > Console. Grab the red startup errors. That’ll help us understand why the extension host isn’t starting on your machine.

The team is aware of an extension host issue after updating to Cursor 3. Let me know how it goes.

I also had the same issue and it is working for me. I was in ubuntu 24.04. So I had the change the path based on ubuntu. Just writing, if anyone with ubuntu can see the direct path. So the steps become:

  1. Clear cache: Delete ~/.config/Cursor/CachedExtensions and
    ~/.config/Cursor/CachedExtensionVSIXs
  2. Reset user data: Rename ~/.config/Cursor to ~/.config/Cursor_backup

I have the same problem on Mac. Moreover, terminal doesn’t load too. Console output:

Workaround: close all Jupyter notebooks and restart Cursor. Wait before all extensions finish loading and terminal appears ready. Open the notebook

@Arseni_Zemskov I see a screenshot with the ms-toolsai.jupyter error. The extension is trying to use API proposals that aren’t in the current product.json. This is part of the same extension host issue after updating to Cursor 3.

Your workaround (close all notebooks, restart, wait for extensions to finish loading) is a helpful tip. I’ll add it to my notes.

If it keeps happening часто, also try:

  • Clear the cache: quit Cursor, delete ~/Library/Application Support/Cursor/CachedExtensions and CachedExtensionVSIXs, then launch it again
  • If that doesn’t help, rename ~/Library/Application Support/Cursor to Cursor_backup for a full profile reset

The team is aware of the extension host issue after Cursor 3. The screenshot with the specific ms-toolsai.jupyter API proposals error helps narrow down the cause, thanks.

Let me know if clearing the cache makes it stable.

here is the screenshot via Console

Is this related to the VS Code version on my pc? My VS Code version is 1.115

It works, but the issue reappears whenever I restart Cursor

It seems like the issue resolved. Here is what I did:

After resetting Cursor, I imported the extensions from VS Code. Following the import, I tested restarting Cursor, and Jupyter is working correctly now.

console log:

Could it be that the VS Code engine inside this version of Cursor is too old?

I spoke too soon. The bug is back.:rofl:

not work, after restart Cursor, bug will reappear

I saw a similar case on Redbook APP, with a proposed solution. I tested it out, and it appears to be a temporary fix that works at the moment. here:

Cursor is stuck connecting to the Jupyter kernel.

When running .ipynb files in Cursor, it always hangs at the “Connecting to kernel…” stage.

Solution: Simply disabling the “Python environment” extension fixes the issue.

Reason: There is a conflict between Cursor and the “Python environment” extension when managing the kernel.

The same problem is happening to me, on Windows 10 and Cursor 3.1.10. I’ve followed @deanrie suggestions and it worked, but the problem always comes back after restarting/updating Cursor, the experience so far working with notebooks is terrible.

I see the updates. I’ll reply point by point:

On the VS Code question in posts #13 and #17: no, the VS Code version on your PC doesn’t affect Cursor. They work completely independently. The built-in VS Code engine in Cursor is a separate copy.

On the workaround with the Python environment extension: that’s a useful find. A conflict between that extension and the extension host in Cursor 3 would explain why Jupyter breaks after every restart. If disabling it helps consistently, keep using that for now.

Another option: instead of fully disabling it, try uninstalling Python Environment and keeping only Python ms-python.python plus Jupyter ms-toolsai.jupyter. Sometimes the conflict is specifically from duplicated functionality.

The team is aware of the extension host issue after updating to Cursor 3. Your report about this specific conflict with the Python environment extension is really helpful, I’ll pass it along.

Let me know if the workaround stays stable with that extension disabled.

  • Clear the cache: close Cursor, delete %APPDATA%\Cursor\CachedExtensions and %APPDATA%\Cursor\CachedExtensionVSIXs, then start Cursor again.

  • Reset user data: close Cursor, rename %APPDATA%\Cursor to Cursor_backup, then start Cursor. It’ll create a fresh profile. If it works, something in the old settings or extensions is conflicting.

  • If nothing helps, roll back to version 2.6.22 so you can at least unblock work.

So nothing helped me and i did follow roll back to version 2.6.22 suggestion… Now I don’t see any of my chats and agent history in the new “old 2.6.22” …

It is super disruptive what you guys did.. to say the least.. I can’t use version 3 but can version 2 but no way I can get my state.vscdb back to v2 … Awesome state … @deanrie I don’t have backup of v2 state.vscdb…

Can you please be kind sharing the next steps (Windows OS): in a very explicit and verbose manner.

Oh my god! I have been struggling for 4 hours. What a waste of time until I found your solution. It works perfectly. Thank you so much for your sharing!

I have the same issue on a windows machine, the issue is returning back every time I start again cursor, after applying the mentioned solution. My cursor is working on the top of VS code.
Temporary to be able to work, I have switch to the free version of Antigravity where I didn’t had to install any extension.
I am waiting to a final solution