Hey, thanks for the report.
This is a known pattern. The mix of resource_exhausted and an endless “Reconnecting” loop usually points to MCP servers or third party API key conflicts that block the connection.
Please try this:
- Cursor Settings > Tools & MCP: If you have any MCP servers connected (especially Perplexity, Figma, or custom ones), temporarily disable them all.
- Cursor Settings > Models: Make sure “Override OpenAI Base URL” is off. If you added any third party API keys (OpenAI or Anthropic), temporarily disable those too.
- Sign out and sign back in (Cursor Settings > Sign Out, then Sign In).
- Start a new chat in a new project folder to test.
This helped other users in the same situation:
- Trouble connecting to the model provider for all Anthropic and Open AI models
- Composer 1 not available at the moment (trouble connecting provider)
If that doesn’t help, try starting Cursor from the terminal with cursor --disable-extensions to rule out extension conflicts.
Let me know how it goes.