Openai Key and Azure API key

General
1

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?
2

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.