VS Code Finally Lets You Use Local AI — No Microsoft Login, No Subscription

Published 31/05/2026

Description

Did you know VS Code 1.122 now lets you connect ANY local AI model — completely free, no Microsoft login required? In this video, I walk you through exactly how to set up local AI inside VS Code using LM Studio and DeepSeek running on a local DGX, no Copilot subscription needed. Contents: 0:00 - Introduction 0:12 - Description 1:12 - Configure LM Studio 5:53 - Configure DeepSeek V4 7:31 - Advanced LM Studio Integration 12:03 - Conclusion One gotcha covered in depth: VS Code uses far more context tokens than you'd expect for even simple questions, so the default 4096 context window in LM Studio will break things. I show you exactly how to pre-configure each model to avoid hitting that wall. What's covered: How VS Code 1.122 opened up the "Bring Your Own AI" feature Setting up LM Studio as a custom endpoint in VS Code Connecting DeepSeek V4 Flash from a local DGX machine Running VS Code in a fully air-gapped, offline environment Configuring the JSON language model file (appdata/roaming) Managing multiple local models side by side Why context length matters and how to fix the 4096 token wall in LM Studio Real-world demos: web browsing, code generation, and code editing via local AI Is local AI good enough to fully replace GitHub Copilot or cloud-based tools? I give you my honest take at the end. If this helped you, smash that like button, subscribe, and hit the bell so you don't miss the next one. #VSCode #LocalAI #CopilotAlternative Follow me on X: https://l.samayas.eu/jo3eaYEf3E?P=YT&V=133 Buy me a Coffee : https://l.samayas.eu/jX6xL7EWhd?P=YT&V=133 Studio Equipment Camera Sony Alpha ZV-E10 II: https://l.samayas.eu/k7y95TREl0?P=YT&V=133 Secondary Camera Obsbot Tail Air: https://l.samayas.eu/iFQu9WfmCw?P=YT&V=133 Elgato Prompter: https://l.samayas.eu/fHVrqqXtSc?P=YT&V=133 Microphone Rode Wireless GO II: https://l.samayas.eu/afBINjiBXN?P=YT&V=133