I hit this after upgrading to Cursor 3: Jupyter notebooks refused to open and the AI panel threw "Agent Execution Timed Out". The fix is one folder delete.
The fastest fix
Close Cursor, delete the stale extension cache, and restart:
- Windows: delete
%APPDATA%\Cursor\CachedExtensionsand%APPDATA%\Cursor\CachedExtensionVSIXs - macOS: delete the same two folders under
~/Library/Application Support/Cursor/ - Linux: delete them under
~/.config/Cursor/
Uninstalling extensions from inside Cursor does not touch these folders. The on-disk cache was written by the Cursor 2.x extension host, and Cursor 3 reads it into a changed process boundary. The host ends up half-initialized: it answers some calls and drops others.
Why both errors appear at once
The AI panel runs on an "agent execution provider" inside the extension host. When the host never answers a tool call, you get the timeout. Jupyter is the other extension that leans on the host hard: opening an .ipynb asks the host to mount a notebook editor, the request never returns, and the tab sits there. One root cause, two symptoms.
If the cache clear is not enough
- Disable the "Python environment" extension as a follow-up. It conflicts with the Jupyter kernel handshake on some builds.
- Reset the whole Cursor profile (exports settings first, reimport after).
- Roll back to Cursor 2.6.22 if you need a working editor today and can retry the upgrade later.
Verify with: open an .ipynb, run a cell, then ask the agent panel one question. All three should respond within seconds.
Full write-up with the rollback steps and the upstream bug thread: https://automatelab.tech/blog/ai-coding/cursor-3-jupyter-agent-execution-timed-out-fix/
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