Visual Studio Code 1.130 adds a dedicated agent host, assisted permissions, compact diffs, worktree isolation, and smarter Git links.

In the new release, developers can experimentally dictate in VS Code without a speech extension and gain deeper insights into subagents.

New controls for model reasoning and Copilot code-review depth let developers decide how much AI effort a task warrants, with speed, depth and credit consumption all part of the tradeoff.

Microsoft's July release adds a Copilot Chat agent preview, workload-specific skills, shared instructions, branch context and C++ build controls.