Microsoft has released Visual Studio Code 1.127, featuring browser tools for AI agents that are now generally available, along with new per-site permission controls for the integrated web view. The update enhances the Agents window by allowing custom session groups, drag-and-drop organization, and tracking of costs associated with subagents. Terminal commands on macOS and Linux now run in a sandbox environment to limit network and filesystem access, while enterprise users can utilize a new method for delivering managed Copilot policies via plain files. Additionally, the built-in Ollama provider has been deprecated in favor of an official extension, streamlining developer workflows with new multi-chat tab management and CI failure banners
Visual Studio Code 1.127 With GA Browser Tools, Agent UI Overhaul, and Terminal Sandboxing released
Microsoft has released Visual Studio Code 1.127, bringing browser tools for AI agents to general availability alongside new per-site permission controls for the integrated web view. The update significantly expands the Agents window with custom session groups, drag-and-drop organization, and cost transparency via subagent credit tracking. Terminal commands on macOS and Linux now execute in a sandbox by default to limit network and filesystem access, while enterprises gain a new plain-file method for delivering managed Copilot policies. The release also deprecates the built-in Ollama provider in favor of the official extension and adds multi-chat tab management and CI failure banners to streamline developer workflows.
