VS Code 1.117 Adds Bring Your Own Key for Copilot Business and Enterprise (April 2026)

Microsoft on April 22, 2026 shipped Visual Studio Code 1.117, the editor's first stable release that lets Copilot Business and Enterprise users plug in their own model API keys — including OpenRouter, Ollama, Google, and OpenAI — directly inside the chat panel. The update also debuts experimental incremental rendering for chat responses and finally fixes the long-standing "node" terminal-title problem for agent CLIs like Copilot CLI, Claude Code, and Gemini CLI.

What Happened

VS Code 1.117 is the April 2026 stable release of the editor and arrived with three flagship changes pitched squarely at teams running multiple AI providers. The headline feature, Bring Your Own Key (BYOK), allows Copilot Business and Enterprise organizations to wire their own language-model API keys for providers such as OpenRouter, Ollama, Google, and OpenAI into VS Code chat. BYOK is on by default, and admins can flip it off through the Bring Your Own Language Model Key policy in Copilot policy settings on GitHub.com.

Incremental chat rendering — gated behind chat.experimental.incrementalRendering.enabled — streams responses block by block instead of using the older timer-based renderer, with configurable animations (fade, rise, blur, scale, slide, reveal) and word/paragraph buffering. The release also bundles TypeScript 6.0.3 as a recovery release that fixes a handful of import bugs and regressions.

Key Details

• BYOK for Copilot Business & Enterprise — Bring your own API keys for OpenRouter, Ollama, Google, OpenAI and more, gated by an admin policy on GitHub.com.
• Incremental chat rendering (experimental) — Streams responses block-by-block; the default animation style is fade and default buffering is word.
• Agent-CLI terminal titles — VS Code now detects Copilot CLI, Claude Code, and Gemini CLI as distinct shell types and uses each CLI's OSC title sequence so the terminal tab labels reflect the running agent (Codex on macOS is not yet supported).
• Copilot CLI works with non-default shells — The Copilot CLI terminal profile now launches correctly even when the default shell is fish, Git Bash, or another non-default profile, fixing the No terminal profile options provided for id 'copilot-cli' error.
• Agent Sessions sort and notifications — The Agent Sessions view can now be sorted by created/updated time, and long-running terminal commands surface as system notifications inside chat.
• VS Code Agents (Insiders) updates — Sub-sessions can now be spawned with + from a session title, with improved inline diff rendering and a smoother cross-OS update flow.
• TypeScript 6.0.3 bundled — minor recovery release fixing import bugs and regressions.

What Developers Are Saying

Reaction has been broadly positive but with a recurring caveat: BYOK was widely seen as overdue. On r/vscode, the top thread on the release thanks Microsoft for "finally letting us point Copilot at our own keys" — a feature competitors like Cursor and Continue.dev have shipped for over a year. Visual Studio Magazine called it "the most enterprise-friendly Copilot release yet," and Windows Report highlighted that the BYOK toggle is governed by an admin policy, which IT teams welcomed.

The agent CLI title fix and Copilot CLI shell support drew the loudest cheers from terminal power users — multiple GitHub commenters thanked the team for resolving terminal-title regressions that have been open since Copilot CLI shipped. The incremental chat renderer, by contrast, is still divisive: some testers say fade animations "finally make Copilot feel as fluid as ChatGPT," while others have already disabled the buffering to get tokens as fast as possible.

What This Means for Developers

If you're on Copilot Business or Enterprise, you can now use your own keys for OpenAI, Google, OpenRouter, or a self-hosted Ollama endpoint without leaving VS Code or paying for a second AI assistant — provided your organization admin allows the BYOK policy on GitHub.com. Personal Copilot Pro users are not yet covered.

If you live in the integrated terminal with Copilot CLI, Claude Code, or Gemini CLI, update today: terminal titles will finally identify which agent is running in each tab, and Copilot CLI will work even if your default shell is fish or Git Bash. Teams running internal extensions should test against TypeScript 6.0.3, which is bundled with this release.

What's Next

The 1.117 release notes mark BYOK as stable but flag incremental chat rendering as experimental — the team is iterating on buffering and animation defaults before promoting it. The VS Code Agents companion app remains Insiders-only, with sub-sessions and inline diff rendering being the most visible additions this cycle. The next stable cut, 1.118, is already in the Insiders sidebar and continues work on the agent app, multi-window UX, and chat polish.

Sources

• Visual Studio Code 1.117 release notes — official Microsoft release announcement (April 22, 2026).
• Visual Studio Magazine — VS Code 1.117 Expands Copilot Controls for Business and Enterprise.
• Windows Report — VS Code 1.117 brings more flexible Copilot integration and faster chat.
• NTCompatible — Visual Studio Code 1.117 released.
• htek.dev — VS Code Weekly: BYOK Unlocks Model Freedom for Enterprise Teams.
• Hamid Raza Dev — VS Code 1.117 hands-on review.