Ryo Lu shares how Cursor evolved from a VS Code extension into a powerful AI-native code editor that redefines developer workflows. Faced with rapid company growth, the design team prioritized simplicity and composability, shifting from a file-centric to an agent-centric model in Cursor 2.0. This change reflects the growing role of AI agents in writing and reviewing code. The interface was overhauled for clarity, ditching visual clutter for a clean, dark-mode-first experience with real-time examples. A new 'baby cursor' enables instant prototyping, freeing designers from engineering bottlenecks. With AI handling routine coding tasks, human designers can now focus on higher-level system thinking and refinement. The future points toward adaptive interfaces shaped by generative AI, but lasting innovation still depends on anchoring design in timeless principles like user obsession and modular architecture.