Visual Studio Code 1.99 Introduces Stable Agent Mode and Expanded AI Features

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Microsoft has released version 1.99 of Visual Studio Code, marking a milestone for AI-assisted development with the formal integration of GitHub Copilot’s agent mode into the stable channel. This March 2025 release also makes several enhancements to Copilot-related tools, AI-powered editing, and developer productivity features across platforms.

GitHub Copilot Agent Mode Now Stable

Agent mode, previously available in preview, is now a stable feature in Visual Studio Code. This functionality allows developers to initiate coding sessions using plain language to describe what they want to achieve. Copilot then acts as an autonomous assistant—analyzing code, identifying the right files, proposing changes, and leveraging tools to carry out tasks.

What makes agent mode stand out is its iterative nature: it monitors results from its actions and refines its approach automatically. This mode even includes an experimental “thinking” feature, designed to allow the AI to pause between steps to optimize decisions.

Users interested in exploring these capabilities can access them via the GitHub Copilot Free plan, or with a subscription for advanced options.

Integration with External Tools Through MCP

The latest release also enables Model Context Protocol (MCP) servers within agent mode. MCP serves as a standardized way for AI models to connect with external environments—such as databases, file systems, or web resources. This makes the AI assistant more adaptive and responsive to real-time developer needs, offering intelligent support beyond just local files.

Next Edit Suggestions Now Generally Available

Another standout feature, Next Edit Suggestions, has graduated from preview to full release. This tool provides developers with in-context edit prompts that are now more compact and visually accessible. Enhancements to the UI, including clearer indicators in the code gutter, help users quickly spot and evaluate AI-generated suggestions.

Additionally, changes have been made to improve the way Copilot handles AI edits: files are saved only when a developer accepts the changes, and diagnostics are suppressed outside the editor during file rewrites. Syntax highlighting for inline suggestions is now active by default.

Other Enhancements in VS Code 1.99

The update isn’t limited to AI features. Several other improvements round out the release:

  • Notebook Enhancements: Developers can now leverage AI-driven editing in Jupyter notebooks, along with a new tool that allows them to launch fresh notebooks directly through chat.

  • Refined Source Control Experience: The reference picker—used for tasks like branch switching or merges—has been upgraded to display commit metadata and branch comparison info.

  • Command-Line Improvements: IntelliSense has been enhanced for VS Code’s CLI tools, adding support for subcommands across code, code-insiders, and code-tunnel.

  • Terminal Simplification: The terminal tab UI has been decluttered by default, making navigation easier for users who prefer a streamlined interface.

  • Shell Integration Security: The PowerShell integration script is now signed, ensuring compatibility with Windows systems that enforce the RemoteSigned execution policy.

  • API Key Flexibility with BYOK: A new preview feature lets GitHub Copilot Pro and Free users connect their own API keys from popular services like OpenAI, Azure, Gemini, Anthropic, and more, offering more control over AI resources.

  • Platform Compatibility Update: VS Code’s prebuilt servers now require Linux distributions that use glibc version 2.28 or later. This change may affect support for older systems.