Microsoft has published Visual Studio Code 1.104, bringing notable changes to how developers interact with AI models and how the editor protects files when AI-driven agents are enabled.
Smarter AI Model Selection
One of the biggest highlights is a preview of automatic model selection in chat. Instead of manually deciding which AI system to use, developers can now pick the “Auto” option in the model chooser. VS Code will then select the most suitable model based on availability, performance, and rate limits.
Over the coming weeks, this capability will become standard for GitHub Copilot users inside VS Code. The automatic selector can switch between major models including Claude Sonnet 4, GPT-5, GPT-5 mini, GPT-4.1, and Gemini Pro 2.5, unless certain models have been restricted by an organization.
In addition, Microsoft finalized the LanguageModelChatProviders API, giving extension authors the ability to plug in their own local or cloud-hosted models. Once installed, these new options also appear in the model picker.
Protecting Workspaces from AI Agents
AI “agent mode” lets the system edit files autonomously, but this power can pose risks if sensitive files are altered or deleted. With version 1.104, VS Code now requires explicit user confirmation before agents modify critical files.
The release also refines the terminal auto-approve feature, giving users clearer control over when automated actions are allowed. Developers can toggle this setting on or off depending on their workflow.
Other Enhancements in Version 1.104
Beyond AI and security improvements, the release includes a variety of developer-focused upgrades:
AGENTS.md support – If a workspace contains this file, it is automatically used as context for chat-based requests.
Interactive tasks in agent mode – When a command or task requires user input, the system prompts the developer directly in chat.
Redesigned changed-files list – Offers better usability when tracking modifications in agent mode.
MCP integration – VS Code now reads instructions from Model Context Protocol servers and includes them in prompts.
Math rendering – Equations are now displayed cleanly in chat responses by default.
Inline suggestion timing – A new setting (editor.inlineSuggest.minShowDelay) lets users control how quickly inline hints appear after typing.
Improved code search – The #codebase tool now relies on a newer embeddings model for semantic search, producing more accurate results.
Terminal improvements – The terminalSelection and terminalLastCommand tools have been moved into the core editor for greater stability.
Release Availability
VS Code 1.104 was released on September 11, 2025, and is available for Windows, macOS, and Linux. The update can be downloaded directly from code.visualstudio.com.
This release follows version 1.103, which shipped earlier in August with enhancements to MCP server autostart settings. Together, these updates continue Microsoft’s push to make VS Code both a secure development environment and a flexible AI-powered editor.
VS Code 1.104: Smarter AI Integration and Stronger Agent Safeguards
Microsoft has published Visual Studio Code 1.104, bringing notable changes to how developers interact with AI models and how the editor protects files when AI-driven agents are enabled.
Smarter AI Model Selection
One of the biggest highlights is a preview of automatic model selection in chat. Instead of manually deciding which AI system to use, developers can now pick the “Auto” option in the model chooser. VS Code will then select the most suitable model based on availability, performance, and rate limits.
Over the coming weeks, this capability will become standard for GitHub Copilot users inside VS Code. The automatic selector can switch between major models including Claude Sonnet 4, GPT-5, GPT-5 mini, GPT-4.1, and Gemini Pro 2.5, unless certain models have been restricted by an organization.
In addition, Microsoft finalized the LanguageModelChatProviders API, giving extension authors the ability to plug in their own local or cloud-hosted models. Once installed, these new options also appear in the model picker.
Protecting Workspaces from AI Agents
AI “agent mode” lets the system edit files autonomously, but this power can pose risks if sensitive files are altered or deleted. With version 1.104, VS Code now requires explicit user confirmation before agents modify critical files.
The release also refines the terminal auto-approve feature, giving users clearer control over when automated actions are allowed. Developers can toggle this setting on or off depending on their workflow.
Other Enhancements in Version 1.104
Beyond AI and security improvements, the release includes a variety of developer-focused upgrades:
editor.inlineSuggest.minShowDelay) lets users control how quickly inline hints appear after typing.#codebasetool now relies on a newer embeddings model for semantic search, producing more accurate results.terminalSelectionandterminalLastCommandtools have been moved into the core editor for greater stability.Release Availability
VS Code 1.104 was released on September 11, 2025, and is available for Windows, macOS, and Linux. The update can be downloaded directly from code.visualstudio.com.
This release follows version 1.103, which shipped earlier in August with enhancements to MCP server autostart settings. Together, these updates continue Microsoft’s push to make VS Code both a secure development environment and a flexible AI-powered editor.
Archives
Categories
Archives
Oracle Expands Java Management Service with Application Analysis and Kubernetes Insights
October 12, 2025VS Code 1.104: Smarter AI Integration and Stronger Agent Safeguards
September 25, 2025Categories
Meta