Internal Error - chat\agents unusable

[Kane_Phipps]

Where does the bug appear (feature/product)?

Cursor IDE

Describe the Bug

When attempting to interact with any model, an Internal Error is received.
Currently using HTTP/1.0 behind a proxy.
Using without a proxy set seems to work.
Reverting to 3.8.24 seems to work

Steps to Reproduce

Use the agent

Expected Behavior

Chat\Agents work

Operating System

Windows 10/11

Version Information

Version: 3.9.16 (user setup)
VS Code Extension API: 1.105.1
Commit: 042b3c1a4c53f2c3808067f519fbfc67b72cad80
Date: 2026-06-27T06:41:01.941Z
Layout: editor
Build Type: Stable
Release Track: Default
Electron: 40.10.3
Chromium: 144.0.7559.236
Node.js: 24.15.0
V8: 14.4.258.32-electron.0
xterm.js: 6.1.0-beta.256
OS: Windows_NT x64 10.0.26100

For AI issues: which model did you use?

Any

For AI issues: add Request ID with privacy disabled

Request ID: 8e9c79c3-b147-4a3b-a437-114ca8940c56
[unknown] Network disconnected
RetriableError: [unknown] Network disconnected
at uAS (vscode-file://vscode-app/c:/Users/phippska/AppData/Local/Programs/cursor/resources/app/out/vs/workbench/workbench.desktop.main.js:12056:27795)
at EMc (vscode-file://vscode-app/c:/Users/phippska/AppData/Local/Programs/cursor/resources/app/out/vs/workbench/workbench.desktop.main.js:12056:26530)
at Fny (vscode-file://vscode-app/c:/Users/phippska/AppData/Local/Programs/cursor/resources/app/out/vs/workbench/workbench.desktop.main.js:12057:11929)
at Object.classify (vscode-file://vscode-app/c:/Users/phippska/AppData/Local/Programs/cursor/resources/app/out/vs/workbench/workbench.desktop.main.js:12057:16434)
at hAS (vscode-file://vscode-app/c:/Users/phippska/AppData/Local/Programs/cursor/resources/app/out/vs/workbench/workbench.desktop.main.js:12057:5824)
at async Oqm.runWithSharedTurnRunner (vscode-file://vscode-app/c:/Users/phippska/AppData/Local/Programs/cursor/resources/app/out/vs/workbench/workbench.desktop.main.js:12057:15786)
at async iH.runAgentLoop (vscode-file://vscode-app/c:/Users/phippska/AppData/Local/Programs/cursor/resources/app/out/vs/workbench/workbench.desktop.main.js:24486:3041)
at async Lkh.streamFromAgentBackend (vscode-file://vscode-app/c:/Users/phippska/AppData/Local/Programs/cursor/resources/app/out/vs/workbench/workbench.desktop.main.js:24505:13862)
at async Lkh.getAgentStreamResponse (vscode-file://vscode-app/c:/Users/phippska/AppData/Local/Programs/cursor/resources/app/out/vs/workbench/workbench.desktop.main.js:24505:22888)
at async IRe.submitChatMaybeAbortCurrent (vscode-file://vscode-app/c:/Users/phippska/AppData/Local/Programs/cursor/resources/app/out/vs/workbench/workbench.desktop.main.js:12142:2399)

Additional Information

This appears to have started with 3.9.16.
Downgrading to 3.8.24 after purging appdata returns functionality to the IDE

Does this stop you from using Cursor

Yes - Cursor is unusable

[Tom_Coustols]

hey @Kane_Phipps, sorry you faced this issue, this is a well discussed topic, there was this thread covering it and also proposing solution to it, it’s long but really useful, you can check it there :

[Bug] always-local-singleton ignores http.proxy and server overrides cursor.general.disableHttp2

Description Since Cursor 3.9.16, AI model requests are handled by the always-local-singleton utility process. This process does not honor the IDE’s http.proxy or http.proxySupport settings — it makes direct connections using Node.js native http2.connect() / https.request() without a proxy agent. Additionally, even when cursor.general.disableHttp2 is explicitly set to true, a server-side value (lastServerHttp2DisabledValue) can silently override it back to false, forcing HTTP/2 connections that …

[Kane_Phipps]

Hi there Tom,

I have tried the settings provided by Mohit and there has been no change. It seems reverting has been the only thing to make an impact

{
  "cursor.general.disableHttp2": true,
  "http.proxy": "http://127.0.0.1:7890",
  "http.proxyStrictSSL": false,
  "http.proxySupport": "override"
}

Using 1.1 with "cursor.general.disableHttp1SSE": true has made no impact either. Normally I have to run with this setting as well because 1.1. does not play well wth our proxies.

[Tom_Coustols]

Noted, it is true that some people weren’t pleased either with the fix proposed, I guess team will have to look into it with your feedbacks too, let’s wait on their callout, maybe they will need more informations from you,

oh, I just checked and it might be worth for you to check this other thread (thought I had shared this one at first, my apologies) :

Desktop model catalog filtered since June 29, but web works (same account)

Where does the bug appear (feature/product)? Cursor IDE Describe the Bug Since June 29, 2026, the desktop app only shows 5 models (Composer 2.5, Grok, Kimi, GLM). GPT and Claude models disappeared from the model picker. This is NOT a standard regional availability issue: WEB APP WORKS: On the Cursor web app (same account, same machine, same network), I can see and use the full model list: Opus 4.8, GPT-5.5, Sonnet 4.6, Codex 5.3. BILLING PROVES PRIOR DESKTOP ACCESS: My usage this bill…

pinging them for reference :
@mohitjain
@deanrie

[mohitjain (Mohit)]

This is the same 3.9.x proxy regression others are hitting - Chat/Agent traffic on 3.9.16 stops going through the proxy, which is why you get Internal Error / Network disconnected behind it, and why 3.8.24 works.

You’re right that those settings (disableHttp2 / proxy override / disableHttp1SSE) didn’t help. That path has been flaky for some proxy setups, including HTTP/1.0 ones - same thread covers it: [Bug] always-local-singleton ignores http.proxy….

We’ve mitigated this on our side for Teams accounts. On 3.9.16, fully quit Cursor (File → Exit on Windows - not Reload Window), then reopen. That should restore the proxy-honoring path without needing those settings.

If it still fails after a full quit/relaunch, stay on 3.8.24 for now and reply here so we can keep tracking your case.