Cloud Automation fails during environment setup with “Environment error” after “Ran update script”. Runs start after enabling on-demand spending, but fail before any agent work begins. Error message: “Agent encountered an error. We encountered an unexpected error repeatedly.” Expanding “Environment error” shows no useful detail.
Steps to Reproduce
Enable on-demand spending in Cursor Dashboard ($10/month cap).
Create a scheduled Automation targeting a private GitHub repo (branch: main).
Use minimal smoke test instructions: create one markdown file and git push.
Run the Automation manually (Run now).
Observe: status shows started/running, then fails with Environment error.
Also tried:
Added .cursor/environment.json with install: “echo no-op” — no change
Switched models (GPT-5.5 High → Composer 2.5) — no change
No custom Team environment; Cloud dropdown only
Expected Behavior
Smoke test should complete: create a test markdown file, commit, and push to main. Automation log should show “smoke test done”.
GPT-5.5 High and Composer 2.5 — same Environment error with both
Additional Information
Private personal Obsidian vault on GitHub. Privacy Mode is active (cloud storage allowed), not legacy. On-demand spending was disabled initially — that caused “Agent failed to start”; enabling it fixed startup but execution still fails at environment setup. Persists across models. No vault contents involved — this is a technical infrastructure issue only.
Hey, thanks for the detailed report. This looks like the same case we discussed in another thread recently, a crash during environment setup before the model even starts, so switching models won’t change anything.
Key point: deleting .cursor/environment.json from the repo does not clear the saved environment on our side. It stays there and keeps getting used. That’s why echo no-op didn’t help. There’s no separate Delete button for environments in the dashboard right now, so you need to clear it another way.
Try this in order:
Force a snapshot rebuild: make any change to environment.json or setup.sh and push it. This should invalidate the current snapshot and trigger a rebuild. Note: if a broken git state is already stuck in the base layer, changing the config might not rebuild from scratch. If that happens, go to step 2.
Reconnect the GitHub repo via Integrations, reconnect or re-authorize, or create a new environment on top of the same repo with a different name. For another user with the exact same issue, reconnecting the repo recreated the environment and fixed it. Details: Environment Error when running Cloud Agent. If the same repo is connected under a different Cursor account, that could also interfere, so it’s worth checking.
Run Automation again.
If it still doesn’t help, temporarily turn off Privacy Mode, run it again, and send a fresh Request ID bcId for that run. With that, we can look at the logs for that specific run and confirm the cause.
Hey, just wanted to check in. Are you still getting an Environment error when starting Automation during the setup step, or is it resolved now?
If the steps above helped (rebuild snapshot / reconnect GitHub repo) or a recent update fixed it, let me know and I’ll close this out. If it’s still happening, please send the Request ID (bcId) from a recent run (you can temporarily turn off Privacy Mode), and we can check the logs for that specific run.
