Yep, you can safely delete AGENTS.md. It isn’t required for cloud agents to work. You can delete it manually or ask an agent to remove it.
A bit of context on why it gets created: the environment setup agent generates AGENTS.md because cloud agents read it as a source of cloud specific instructions, like how to run tests, start services, and so on in a cloud VM. Docs: Setup | Cursor Docs
If you already have rules or skills set up in .cursor, cloud agents will pick those up too. Just keep in mind that if you ever need instructions that are specific to the cloud and different from local development, like special test commands for the cloud VM, AGENTS.md is the recommended place for that. But if your .cursor rules cover everything, you’ll be fine without it.
The team knows that auto creating AGENTS.md during environment setup isn’t ideal when users already have their own config.