Build AI agents seamlessly within VS Code using Microsoft’s AI Tools Extension Pack. From exploring models and testing prompts to cleaning data and deploying agents on Azure, this integrated toolkit streamlines every step—empowering developers to create smart, efficient AI solutions faster than ever. Unique :

Build AI Agents End-to-End in VS Code with Microsoft’s New Extension Pack
If you’ve ever wanted to build an AI agent but felt overwhelmed by APIs, datasets, and cloud deployment, Microsoft’s latest update is here to help. Visual Studio Code (VS Code) is no longer just a code editor—it’s now a full AI development environment. The new Microsoft AI Tools Extension Pack integrates everything you need to design, test, and deploy AI agents seamlessly.
What’s New: The Microsoft AI Tools Extension Pack
This extension pack bundles multiple powerful tools into one smooth workflow. It includes:
- AI Toolkit: Explore and create AI agents with local and cloud models.
- Azure AI Foundry: Manage and deploy AI models using Azure services.
- GitHub Copilot & Copilot for Azure: AI-assisted coding tailored for cloud development.
- Data Wrangler: Simplify data cleaning and preparation for AI workflows.
“No more jumping between platforms or copy-pasting data across tools. Just one smooth, integrated experience.”
Major Updates: Streamlining AI Agent Development
Step 1: Explore and Choose Models
The AI Toolkit and Azure AI Foundry extensions offer a Model Catalog to browse various AI models. You can compare them based on speed, cost, language support, and more. This helps you pick the best fit for your project from cloud-hosted or local models.
Step 2: Test Models with the Playground
Before committing, test different prompts on multiple models using the AI Toolkit’s Playground. It supports side-by-side comparisons, letting you see which model generates the best, most consistent results.
Step 3: Clean Your Data with Data Wrangler
Messy CRM exports become usable datasets thanks to Data Wrangler. Clean data ensures your AI agent’s responses are relevant and grounded in real company knowledge, not just generic training data.
Step 4: Prototype Your Agent
Bring your AI agent to life using either the AI Toolkit’s Agent (Prompt) Builder or Azure AI Foundry’s Agent Designer. Both tools let you configure multi-turn conversations, integrate plugins, and define how your agent behaves.
“A well-prepared CRM dataset can become a valuable source of grounding information.”
Why This Matters to Developers
Building AI agents often means juggling multiple tools and platforms. Microsoft’s solution puts everything under one roof in VS Code, speeding up development and reducing friction. Whether you’re crafting a sales briefing assistant or a complex multi-tool AI, this extension pack helps you build smarter, faster.
In short, VS Code is evolving into your AI workshop—making end-to-end AI agent creation accessible and efficient.
From the New blog articles in Microsoft Community Hub