Scalable Human Blog

VS Code v1.99 brings powerful AI upgrades like Agent Mode, a unified chat interface, and improved prompt management—pushing it closer to tools like Cursor. While Agent Mode still has room for performance improvements, the overall update marks a major leap in developer productivity.If you’re a developer who lives inside VS Code, the March 2025 v1.99 update is a big deal. It’s not just another patch—it’s a bold step toward making AI a first-class coding companion. With features like Agent Mode and enhanced prompt tooling, VS Code is evolving from a lightweight code editor into a full-blown AI-augmented IDE. Here’s what stands out—and some personal thoughts on where it shines (and where it still lags).

🚀 AI-Powered Agent Mode (Stable Release!)

Agent Mode is now officially stable, and it’s the headline feature. Think of it as your autonomous coding assistant—it can search your codebase, fetch documentation, run tools, and even scaffold entire projects. It supports the Model Context Protocol (MCP), which allows it to work with a variety of LLMs.

Personal Feedback:
After testing Agent Mode with GPT-4o, I found it a bit slow and occasionally clunky. That said, it’s still early days, and performance may vary with different models. The potential is huge, especially as the ecosystem matures.

💬 Unified Chat View

No more context switching between Ask, Edit, and Agent modes. The new Unified Chat View keeps your AI conversations in one place, making it easier to maintain flow and continuity.

🔑 Bring Your Own Key (BYOK)

You can now connect your own API keys from OpenAI, Anthropic, Gemini, Ollama, and more. This is a big win for developers who want more control over their AI stack or prefer specific models.

🧠 New AI Tools & Features

• #fetch: Pull live website content directly into your prompt. Perfect for real-time documentation or scraping examples.
• #usages: Deep dive into references, implementations, and definitions across your codebase.
• Thinking Tool: Adds a “reflection time” between AI actions, improving complex task handling.
• Next Edit Suggestions (GA): Smarter, cleaner code edits are now generally available.
• AI Notebook Editing: Edit Jupyter notebooks like regular code files—edit cells, undo changes, and even add outputs.

✍️ Prompt & Model Management

• .prompt.md Files: Create reusable prompt files with autocomplete, diagnostics, and sync support.
• User Prompts: Save your favorite prompts and sync them across devices.
• Semantic Search (⌘I): Context-aware search results powered by AI—super helpful for large codebases.

🖥️ Editor + Terminal Upgrades

• Inline Suggestion Highlighting: Ghost text now has syntax coloring for easier readability.
• Improved IntelliSense in Terminal: Real-time command suggestions with icons and better context awareness.
• Tree-sitter (Preview): Enhanced syntax highlighting for CSS and RegEx in TypeScript.

🐍 Python Devs, Rejoice

• Editable Install IntelliSense: Better support for pip install -e ., finally!
• Faster Diagnostics: Especially for large or recently modified projects.

🏢 Enterprise & Remote Updates

• macOS Device Management is now supported, matching Windows capabilities.
• Legacy Linux Servers are no longer supported out of the box, though workarounds exist for glibc/libstdc++.

✅ Key Takeaways

• Agent Mode is powerful but needs performance tuning—especially with larger models like GPT-4o.
• Unified Chat View and BYOK make AI integration more seamless and customizable.
• New AI tools like #fetch and AI Notebook Editing are game-changers for productivity.
• Prompt management features make it easier to build and reuse custom workflows.
• VS Code is closing the gap with Cursor, and its open ecosystem gives it a strong edge.

🎉 Conclusion
VS Code v1.99 is more than just an update—it’s a shift in how we code. While tools like Cursor still lead in some areas, VS Code is catching up fast, especially with GitHub Copilot in its corner. If you haven’t explored these new features yet, now’s the time. The future of AI-assisted development is unfolding—and VS Code is right at the center of it.