VS Code 1.140 Update Adds Multi-Folder Sessions and Remote AI Agent Delegation
Microsoft has released Visual Studio Code version 1.140, focusing heavily on GitHub Copilot AI agent capabilities. The update introduces experimental multi-folder sessions, remote task delegation, agent architecture standardization via Agent Host Protocol (AHP), and HydraFusion model orchestration. This update transitions developer tools from simple code autocompletion toward autonomous, distributed AI agents capable of handling complex cross-repository workflows. Standardizing agent sessions across VS Code, CLI, and standalone apps creates a unified ecosystem for agentic development. Experimental multi-folder sessions isolate terminals, tasks, code changes, and PR states across different chats within an agent session to prevent accidental cross-repo edits. Additionally, HydraFusion dynamic routing dynamically orchestrates models like Claude and GPT to balance speed, cost, and code accuracy.
## BACKGROUND
Modern AI coding tools rely on AI agents—autonomous routines capable of executing multi-step tasks such as writing code, running tests, and managing Git status. Microsoft's Agent Host Protocol (AHP) creates a standardized backend session server so multiple interfaces (like VS Code and CLI) can share and synchronize a live AI agent session. HydraFusion is GitHub's research preview feature that dynamically assigns different parts of a coding task to various LLMs for optimal performance and cost reduction.