Openai Key and Azure API key

How does cursor IDE use the entered openai key or Azure API base url and key:

  1. Directly hit openai / provided azure end point
  2. Give the keys to cursor sh backend server and proxy the call via it?

No. 2. Cursor still has to do some stuff in the backend. But it won’t store your key. And your prompts also won’t be stored if you have “Privacy Mode” enabled.