Visual Studio Code 1.117 Brings BYOK Copilot Keys and Smarter Terminal Handling
Visual Studio Code 1.117 lands with a few practical upgrades that actually matter for teams juggling multiple AI models and messy terminal workflows. The update finally lets business users plug in their own API keys directly into the chat interface, streams responses more smoothly, and fixes some long-standing terminal profile headaches. Here is what developers need to know before updating.
BYOK Setup for Copilot Teams
IT departments love locking down model access, but developers hate switching apps just to run a compliant query. The bring your own key feature targets business and enterprise setups where compliance or cost dictates which language models get used. Instead of forcing engineers out of their editor, the chat interface now accepts API keys from providers like OpenRouter, Ollama, Google, and OpenAI directly inside VS Code. Administrators control this through a policy setting on GitHub.com, which keeps the organization locked down while letting developers stay in their preferred workflow. It is a straightforward fix for teams that have been stuck using outdated models just because security refused to approve new ones.
Smoother Chat Streaming and Session Sorting
Incremental rendering moves away from the old timer-based approach by streaming chat responses block by block as they arrive. This cuts down that awkward pause where users stare at a blank box waiting for a full response to materialize. The feature sits behind an experimental toggle, so teams can adjust buffering levels or swap out animation styles if the default fade effect feels too flashy. When agent sessions pile up, sorting them by recent activity finally makes it possible to jump back into a specific task without scrolling through a graveyard of abandoned prompts.
Terminal Profile Fixes and Background Command Tracking
Long-running terminal commands used to vanish into the background with no clear way to monitor their progress. The latest build now pushes system notifications straight into the chat response, so developers can track execution without constantly alt-tabbing away from their code. There is also a fix for a frustrating quirk where selecting GitHub Copilot CLI from the terminal profile picker would crash if the default shell was set to something like fish or Git Bash. Terminal titles now properly identify agent CLIs like Claude Code and Gemini CLI instead of just showing a generic node label, which saves time when multiple terminals are open at once.
Agents App Updates for Insiders Users
The companion Agents app remains in preview and only ships with the Insiders channel, but it gets enough polish to be worth testing. Sub-sessions let developers spawn parallel research threads or code reviews without losing context in the main window. Inline change rendering has been tightened up so diffs are easier to scan when an agent modifies files. The update flow across operating systems also runs smoother now, and general UX tweaks keep the interface from feeling as disjointed as previous builds.
TypeScript Recovery and Housekeeping
Visual Studio Code 1.117 bundles TypeScript 6.0.3 to patch a handful of import bugs that caused unnecessary build failures. The release also quietly marks several settings for deprecation, which means older configurations will eventually trigger warnings or break in future updates. Teams should review their custom keybindings and task definitions before rolling this out to production machines.
Downloads
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Mac:
Linux:
Grab the update when ready, test the BYOK policy with a sandbox account first, and keep an eye on those experimental chat toggles if you prefer predictable output over flashy animations. Happy coding.
