By ByteBot
Microsoft officially deprecated VS Code’s IntelliCode extension this week with the November 2025 release of VS Code 1.107, directing the tool’s 60+ million users to the paid GitHub Copilot instead. IntelliCode provided free, local AI-powered code completion with no cloud dependencies or subscriptions. Copilot offers 2,000 free completions per month, then requires $10/month (individual) or $19/month (business). With VS Code holding 75.9% market share among developers, this affects the majority of the global developer community. This is what enshittification looks like in developer tools.
Free AI Code Completion Is Dead—Long Live Paid Subscriptions
IntelliCode was completely free with unlimited usage, local processing (no cloud), and zero subscriptions. It ran a lightweight GPT-C model entirely on your machine—your code never left your computer. Microsoft archived the IntelliCode repository on November 12, 2025, ending all bug fixes and support immediately.
Now Microsoft wants you to use GitHub Copilot instead. Copilot’s free tier offers 2,000 completions per month plus 50 chat requests. That’s roughly 80 completions per working day. Heavy users will exhaust this in one to two weeks. After that, you pay $10/month for Copilot Pro (unlimited completions) or $19/month for Copilot Business. For a feature that was free and unlimited, Microsoft is now charging $120 to $228 per year.
This is textbook enshittification: attract users with free features, build dependency, then monetize aggressively. Developers who relied on IntelliCode now face a choice: pay Microsoft $10-20/month or lose AI-powered completions entirely. Moreover, this sets a dangerous industry precedent—if Microsoft can kill free AI features, expect Google, JetBrains, and others to follow suit.
Developers Aren’t Happy—And They’re Leaving
The Hacker News discussion on December 16 (66 points, active debate) shows strong developer anger. One comment summed it up bluntly: “Doing Microsoft things”—referencing the company’s historical pattern of removing free alternatives to push paid services. Another developer described Copilot’s aggressive upsell tactics: “You’ve reached your monthly code completion limit. Upgrade your plan to Copilot Pro (30-day Free Trial).”
Furthermore, developers aren’t just complaining—they’re migrating. The Hacker News thread mentions NeoVim (“superior RTL support, life-changing syntactic navigation”), Zed (“native, fast, Vim mode”), Helix (“works well on download”), and Cursor. Additionally, one long-time JetBrains customer warned: “Removing on-device code indexer and suggestion systems would end my 15-year subscription.” Trust matters, and Microsoft is burning through goodwill fast.
Consequently, alternative AI coding tools are benefiting from the backlash. Stack Overflow’s 2025 survey shows Cursor at 18% adoption, Claude Code at 10%, and Windsurf at 5%. Those numbers will grow as frustrated developers look for better options. If Microsoft loses developers’ trust, VS Code’s 75.9% market share could erode—even dominant players can fall.
Related: OpenAI Codex CLI: Rust Terminal Agent Goes Open Source
Local AI Models Are Gone—Cloud Dependency Is Mandatory
IntelliCode used a local GPT-C model with on-device inference. Your code never left your machine. Copilot sends code to Microsoft’s cloud (OpenAI Codex API) for processing. For developers working with proprietary code—financial services, healthcare, government contractors—this is a deal-breaker.
Privacy isn’t just a nice-to-have. It’s a legal requirement for many developers. Removing IntelliCode forces developers to choose between AI features and data security. Meanwhile, privacy-focused alternatives are gaining traction: JetBrains AI Assistant with local models, Continue.dev with Ollama support, and Tabnine Enterprise. Microsoft removed the only free, privacy-preserving AI option in VS Code. Developers who care about data security now have to look elsewhere.
The Good News: You Have Options
Microsoft’s move is accelerating adoption of alternative AI coding tools. Developers have viable, competitive options—some free, some more powerful than Copilot.
Cursor ($20/month) is a standalone IDE built on VS Code, offering GPT-4, Claude 3.5 Sonnet, and Gemini with unlimited usage. Claude Code (Anthropic) works in the terminal, reads your entire codebase, and handles multi-file edits with explicit rollbacks. Aider (open-source) supports local models via Ollama or cloud models, giving you full control. Cline (free) is a VS Code extension where you bring your own API keys. JetBrains AI Assistant offers local model options without cloud dependencies. Continue.dev (free) is another VS Code extension supporting local models via Ollama.
Stack Overflow’s 2025 survey shows Cursor at 18% adoption, Claude Code at 10%, and rising fast. This backlash could accelerate AI IDE fragmentation and challenge VS Code’s dominance. Microsoft isn’t the only game in town, and developers frustrated with IntelliCode’s removal have somewhere to go.
What This Means for the Industry
Microsoft’s IntelliCode deprecation follows a broader industry trend: developer tools moving AI features from free to paid tiers. Google Workspace, Adobe Creative Cloud, and Figma have all moved AI features behind paywalls in 2024-2025. If Microsoft succeeds, others will follow.
Expect subscription fatigue. $10/month Copilot plus $20/month Cursor plus $9/month ChatGPT equals $39/month just for AI tools. By 2026, most AI coding features will likely require subscriptions. The “free AI era” is ending. Nevertheless, developers should vote with their wallets. Alternatives exist. Use them.
Key Takeaways
- Free AI coding features are ending. Budget for subscriptions or use open-source alternatives like Aider, Cline, or Continue.dev with local models.
- Microsoft’s IntelliCode removal sets industry precedent. Expect Google, JetBrains, and others to follow suit. The pattern is clear: free → freemium → paid.
- Copilot’s 2,000/month free tier isn’t enough for heavy users. Plan to pay $10-20/month if you’re a power user, or exhaust your limit in 1-2 weeks.
- Alternatives exist and are growing fast. Cursor (18% adoption), Claude Code (10%), Aider, Cline, JetBrains AI, and Continue.dev offer competitive features—some free, some more powerful than Copilot.
- Privacy matters. IntelliCode was local, Copilot is cloud-based. Choose tools that match your security needs. JetBrains AI Assistant, Continue.dev, and Tabnine Enterprise support local models.
Microsoft bet developers won’t switch. Time will tell if they’re right.
