When Smart AI Gets It Wrong: Diagnosing the Knowing-Doing Gap in Language Model Agents
“You expect AI to be dumber than humans. But when it’s smarter and still fails, that’s when it hurts.” Earlier this month, Cursor AI’s chatbot “Sam” fabricated a nonexistent refund policy, confidently explaining to users why it was entitled to keep their subscription money—even when those users were eligible for a refund1. The backlash was immediate. Users lost trust. Some cancelled their subscriptions entirely. ...