The team behind the Visual Studio code shared major updates. VS Code is now officially becoming an open source AI editor. Microsoft has created Github Copilot Chat Extension open source, all providing AI features directly to the core editor under the MIT license.
In an announcement about X, the VS Code team wrote:
“Today, we are announcing plans to turn VS Code into an open source AI editor. We believe that AI development should remain true to the core principles of VS Code: open, collaboration, community-driven. Let’s build the future of software development together.”
Today we are announcing plans to turn VS Code into an open source AI editor.
We believe that AI development should remain faithful to the core principles of VS code. It is open, collaborative and community-driven. Let’s build the future of software development together. https://t.co/c3ffio6x88 pic.twitter.com/szj9vjxvle
– Visual Studio Code (@code) May 19, 2025
VS Code became the first fully open source AI-powered code editor
This move shows a shift in how developer tools think about AI, deepening its relationship with Microsoft’s open source community. The announcement, shared on the official vs. code site, outlines the reasons behind the changes, what comes next, and plans to involve the community.
Why now?
VS Code has been one of the most successful open source projects on GitHub for many years. A big part of its success comes from its community. As AI begins to play a bigger role in software development, Microsoft wants to maintain the same openness at the heart of its strategy.
Several things pushed them in this direction:
The language model has been improved so that you don’t have to resort to secret, quick tricks to get good results. This makes it possible to open source key components without losing quality.
The AI interaction pattern is stable. Now most editors follow a similar approach to AI-assisted coding. Microsoft sees this as an opportunity to share a common foundation that others can build.
Extension developers want that. Many developers are building AI-powered extensions without accessing Copilot Chat source code. Opening up procurement should make their lives easier.
Transparency of your data is important. Developers have raised concerns about how AI tools collect and use data. By publishing the source, users can look into what’s going on behind the scenes.
Security is also important. As more AI tools become targets for bad actors, Microsoft bets that community visibility will help you find issues faster.
What’s going on next?
Microsoft says it will open source GitHub Copilot Chat Extension under the MIT license and will begin moving Key AI features to Core vs Code CodeBase. Additionally, rapid testing tools are available, making it easier for contributors to test how AI features respond to inputs.
This is not just about transparency. The goal is to provide AI capabilities that are as simple as working with other parts of VS code.
New features have already been deployed
Microsoft has also previewed some of the live or coming soon AI-centric tools.
Copilot Agent Mode (Preview): A new way to interact with Copilot for multi-step coding tasks.
Copilot Next Edit Prostations (Preview): Edit ideas that will help streamline your inline AI code.
VS Code opens the door to more users.
Copilot Extensions: A growth library of extensions that connect to the Copilot ecosystem.
Other updates include features such as custom instructions. Custom instructions allow developers to shape Copilot’s responses. Microsoft also teased Copilot Edits and Multi-Context Prompting (MCP) – features aimed at making AI more context-aware.
The whole picture
Microsoft doesn’t just add AI to VS code. It drives the future that AI coding tools are not only offered through the black box, but also part of the open source ecosystem. By opening Copilot Chat and folding AI into the core experience, Microsoft is betting on transparency, developer trust, and community engagement.
For developers, it means the flexibility, more access, and less unknown behind the tools they use every day.
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