Visual Studio Code Adds New AI Model Discovery and Browser Features

Microsoft has released Visual Studio Code 1.125, introducing several improvements focused on AI integration, browser functionality, extension management, and enterprise administration.

The latest update arrives just one week after the release of VS Code 1.124 and continues Microsoft’s push to make AI-powered development features easier to access and manage.

VS Code 1.125 Makes AI Models Easier to Discover

One of the biggest changes in Visual Studio Code 1.125 is a new way to discover and install AI model providers.

The Language Models editor now includes an “Install Model Providers” button. Clicking the button opens the Extensions view with a filtered list of extensions that add language model providers to VS Code.

Once installed, available AI models automatically appear in the model picker, making it easier for developers to switch between supported AI services without manually searching for compatible extensions.

The change comes as AI coding assistants become a core part of the development workflow. Microsoft has steadily expanded AI capabilities inside VS Code through GitHub Copilot and support for third-party language models.

Integrated Browser Gets Search and Remote Access Improvements

Microsoft is also expanding the capabilities of VS Code’s integrated browser.

Users can now perform web searches directly from the browser address bar. Searches use the developer’s preferred search provider, which can be configured through the workbench.browser.searchEngine setting.

For developers working in remote environments, the integrated browser can now proxy HTTP and HTTPS traffic through remote workspace connections.

This allows access to internal services, development environments, and ports that may only exist on the remote machine. The feature should prove useful for developers working with containers, cloud environments, or remote servers.

Extension Updates Become More Configurable

VS Code 1.125 also introduces a new setting called extensions.autoUpdateDelay.

The feature allows users to control how long VS Code waits before automatically updating extensions.

The addition arrives as software supply chain security continues to receive increased attention across the developer ecosystem. Giving users and administrators more control over extension update timing can help organizations validate updates before deployment and reduce the risk of unexpected changes affecting development environments.

GitHub Copilot Management Expands for Enterprises

Enterprise administrators are getting additional control over GitHub Copilot deployments.

Microsoft now supports the delivery of managed Copilot settings through native Mobile Device Management (MDM) platforms on both Windows and macOS.

Previously, organizations primarily relied on account-based enterprise configuration files. With the new approach, administrators can deploy policies directly through device management systems.

Any settings delivered through MDM appear as policy-enforced inside VS Code, preventing users from overriding them locally.

Microsoft says future releases will continue expanding the number of Copilot policy settings that organizations can manage centrally.

The release continues Microsoft’s broader effort to position Visual Studio Code as a central hub for AI-assisted development while adding more enterprise-grade management capabilities.

In other news, Microsoft is reportedly exploring DeepSeek V4 as a potential way to reduce operating costs for Copilot Cowork, its enterprise-focused AI productivity platform.