Visual Studio Code is getting a major upgrade this month with the release of version 1.104, codenamed “Eclipse.” This update is packed with exciting improvements, especially for developers who are exploring AI-powered tools inside their workflow.

One of the headline features is the new auto model selection for chat. Instead of you manually choosing a model, VS Code can now automatically pick the best one based on your needs. That could be Claude Sonnet 4, GPT-5, or Gemini Pro 2.5. The idea is to give you smoother performance while helping you avoid rate limits. And here’s a nice touch: paid users get a 10% discount on requests. Plus, if you’re ever curious about which model is being used, you can simply hover over the chat response to see the details.

Notebook users are also getting some love. There’s now an experimental setting that allows the language model to access your entire notebook. This should deliver much smarter and more accurate edit suggestions. On top of that, Python developers can enable AI-powered hover summaries for symbols that don’t already have documentation — a fantastic way to quickly understand code that might be new or unfamiliar.

Now, it’s worth noting that these advanced features — like the enhanced notebook suggestions and hover summaries — are currently exclusive to GitHub Copilot Pro and Enterprise users. There’s no official timeline yet for when they’ll land in the stable version, but we can be hopeful that it won’t be too far off.

Another major improvement is around security and control. The AI agent can now ask for confirmation before it makes edits to sensitive files in your workspace. This is a big deal, since it helps prevent accidental or even malicious changes. Developers can also fine-tune which files require confirmation using the chat.tools.edits.autoApprove setting. On top of that, VS Code now shows warnings if a command tries to pull content from the internet with tools like curl or wget — an important safeguard against prompt injection attacks.

And finally, there’s something really interesting for teams: support for AGENTS.md files. These files act as instruction guides for AI agents. You can use them to provide context or set rules, and VS Code will automatically apply them in your chats. It’s a clever way to stay organized, especially if multiple AI agents are part of your workflow.

So, overall, version 1.104 is shaping up to be one of the most impactful releases in recent memory — bringing smarter AI integration, stronger security, and better collaboration tools right into the editor.