Visual Studio Code is Microsoft's flagship code editor that is known for its speed, flexibility, and a vast ecosystem of extensions that few other code editors can match.
However, as AI-powered development tools rapidly establish themselves in the space, VS Code has found itself playing catch-up with its AI-powered forks like Cursor in this new era of AI-first IDEs.
In response, Microsoft has announced plans to open source one of its most popular AI extensions, GitHub Copilot Chat, under the MIT License and integrate it directly into VS Code.
What's Happening: Going forward, the VS Code team aims to embed AI tech deeply within the editor itself, moving away from relying on extensions for such capabilities. To achieve that, they plan to integrate relevant components from the extension into VS Code core, offering AI functionality as in-built features of the editor.
We already know how hard Microsoft has been pushing AI across its products and services, and now they’re not stopping there, making sure VS Code keeps up when it comes to AI features.
Do keep in mind that they’re not open-sourcing GitHub Copilot itself, just the Copilot Chat extension that brings AI chat features into VS Code.
What to Expect: The developers intend to gradually move key parts of the extension into VS Code once it’s open sourced. After that, contributors would fix bugs, test features, and help improve the AI.
Meanwhile, you can keep an eye out on Microsoft's GitHub project page, where the source code for the GitHub Copilot Chat extension should show up eventually. You can track progress on this by visiting the issue for it.
They have also put up an FAQ page if you would like to learn more.
If you ask me, Microsoft's move hasn't come out of nowhere. VS Code-based editors like Windsurf have been gaining traction by offering AI-first coding experiences that feel faster and more native, while also paving the way for vibe coding.
VS Code, despite its popularity, started to look like it was falling behind, but this new push signals a clear intent to catch up and stay relevant in the AI-powered IDE space.
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