Microsoft announced a new version of Visual Studio Code during its Build 2026 developer conference. Version 1.123 focuses primarily on further integrating AI functionality into developers’ daily workflows. Of particular note is the ability to synchronize AI context and work sessions across different devices.
Developers logged in with a GitHub account can now take not only chat conversations but also modified files, repository information, and linked pull requests with them to another machine. This should make it easier to seamlessly continue work, regardless of where a session is resumed, according to Neowin.
Another new feature is Chronicle. Using the /chronicle command, users can search past AI sessions in natural language. Additionally, the feature can automatically generate summaries of completed work and provide insights into one’s own productivity.
Research tool for complex code
Microsoft is also further expanding the capabilities of its AI agents. With the new Research Agent, developers can use the /research command to conduct in-depth research on a codebase, API, or software project. The agent combines information from local source code, GitHub repositories, and online sources and delivers a report in Markdown format.
Working with multiple AI sessions simultaneously is also becoming easier. Users can open and pin different agents side by side to directly compare code, answers, or analyses.
Under the hood, Microsoft has changed how AI agents handle network connections. When a task within a secure sandbox requires additional internet access, VS Code automatically attempts to re-run it with broader network permissions. Only when that fails does it fall back to execution outside the sandbox. According to Microsoft, this preserves file system protection without stalling network-dependent tasks.
Browser and security updates
VS Code’s built-in browser is also getting an update. Developers can now take more targeted screenshots of specific parts of a page or entire websites. These images can then be used directly as context in conversations with AI assistants. Microsoft has also expanded tab management and added support for favorite pages in the address bar.
In terms of security, the company is taking a cautious approach. Updates to third-party extensions will now be rolled out with a two-hour delay. This extra time is intended to prevent malicious or defective updates from spreading immediately to large numbers of systems.
VS Code 1.123 is available for Windows, macOS, and Linux. The release underscores once again that Microsoft is increasingly positioning the code editor as a platform for AI-powered software development.