VS Code 1.118 — A Complete Overhaul of the Copilot Agent Experience

On April 29, Visual Studio Code version 1.118 was released. This update focuses on Copilot and the agent experience, and includes many changes that touch the core of developer workflows.

AI Co-Authors in Git Now On by Default

The automatic attribution of an "AI co-author" — previously opt-in — is now enabled by default in both chat and agent workflows. Any commit where Copilot modified files will automatically have Copilot added as a co-author. This can be changed via the `git.addAICoAuthor` setting.

A Dedicated Agents App (Insiders)

VS Code Insiders now offers the "Agents App," an agent-native working environment. It is a standalone companion app that handles multiple repositories in parallel sessions, letting you focus on multi-step coding tasks. Claude Agent is also available, and the app can be accessed from the browser via `insiders.vscode.dev/agents`.

Semantic Search Now Available Across All Workspaces

The semantic index, previously limited to GitHub and ADO repositories, is now open to all workspaces. You can now search code by its "meaning" — even for a vague question like "Where is user authentication handled?", it can identify files that use related terms such as `login`, `signIn`, and `verifyCredentials`.

Major Improvements in Token Efficiency

With GitHub moving Copilot to usage-based billing starting June 1, the VS Code team has focused on improving token efficiency.

Prompt cache optimization**: Reusable at roughly 10x lower cost on Anthropic models. After an agent session starts, over 93% of each request is reused from the cache

Tool Search Tool**: Tools are split into a core set of about 30 that are always available (covering 88% of tool calls) with the rest loaded lazily. Reduces tokens by up to 20% on Anthropic models, and rollout to GPT-5.4/5.5 has begun

Dedicated search and execution tools**: New search and execution tools that run on smaller models, each achieving roughly 20% token savings

WebSocket support**: WebSocket mode is supported for OpenAI models, delivering a 12% speedup

Chronicle — Putting Chat History to Work (Experimental)

When `github.copilot.chat.localIndex.enabled` is turned on, chat history is recorded in a local SQLite database. The following commands become available:

`/chronicle:standup` — Generates a standup report covering the last 24 hours

`/chronicle:tips` — Suggests prompt improvements based on 7 days of usage patterns

`/chronicle [query]` — Natural-language search over your history

TypeScript 7.0 Beta Support

Beta support for TypeScript 7 (a complete rewrite in native code) has been added. Even in VS Code's own development builds, type checking has been cut from about 60 seconds to about 10 seconds, and full builds now complete in 30 seconds.

Remote Control for Copilot CLI

With an experimental remote control feature, you can now check the progress of and approve actions in a running Copilot CLI session from GitHub.com or the GitHub mobile app.

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Simon Willison's LLM CLI Undergoes a Major Refactoring in 0.32a0

Version 0.32a0 of the `llm` command-line tool developed by Simon Willison has been released. It is a large-scale refactor that preserves backward compatibility, aimed at cleaning up the internal structure and improving extensibility.

The tool makes it easy to interact with LLMs from the terminal, with support for multiple providers and a plugin mechanism. This refactoring is positioned as groundwork for future feature additions.

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Criteria for Choosing Between Private LLMs and ChatGPT in the Enterprise

Morai has published an article titled "Private LLM vs ChatGPT in Business." It presents a practical decision framework for when to use public tools like ChatGPT versus private LLMs.

The article argues that while ChatGPT is well suited to the experimentation phase and general-purpose tasks, a shift to private LLMs becomes necessary once data sovereignty, consistency, and system integration are required. Framing it as "ChatGPT is a tool; a private LLM is infrastructure," it offers a decision axis aligned with the stage of a company's AI adoption.

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Qwen3.6-27B Shows Off Local SVG Image Generation

SVG image generation with the Qwen3.6-27B model (Q6_K quantization) is making waves in Reddit's r/LocalLLaMA community. From an illustration of a pelican riding a bicycle to a scene of a capybara in a kimono drinking matcha, it is remarkable how much expressive power open models running locally have now attained.

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Wrap-up

VS Code 1.118 can be seen as a release that symbolizes the maturing of the AI development environment. From a standalone app for the agent experience to systematic improvements in token efficiency to the opening up of semantic search, AI features are evolving in ways that blend into developers' daily work. In particular, efficiency improvements premised on the shift to usage-based billing look likely to influence the entire ecosystem.