Skycode: Custom VS Code Extension Optimizes AI Coding Agent for Corporate Closed-Loop LLMs

A Russian developer has published Skycode, an open-source VS Code extension that turns the editor into a capable AI coding agent designed specifically for corporate closed-loop environments.

The tool was created because popular assistants such as GitHub Copilot and Cursor send code to external servers, which is unacceptable in regulated sectors such as energy where information security teams maintain strict data boundaries. Instead, the organization operates an internal gateway running the Qwen model, which delivers good performance on short tasks but is constrained by an approximately 100 000-token context window.

To stay within this limit the extension implements several context-saving techniques: files are read line-by-line or via a dedicated read_symbol tool that extracts only individual methods or classes; unchanged files are replaced with a short “file unchanged” marker on subsequent reads; terminal output is truncated to beginning and end; and the entire conversation history is summarized when the context approaches its ceiling. A visual ring indicator shows exactly how much of the context is consumed by files, command output, or history.

Additional safeguards prevent common model misbehaviors. Temperature settings were adjusted to reduce repetitive loops, and the agent now prompts the model to continue when it stops after writing a single sentence. If an answer is cut off mid-file write because of length limits, the partial file is discarded and the model receives guidance to split the work into smaller steps.

Users can open multiple independent tasks in separate tabs that run in parallel while the developer continues editing. Messages queue automatically, and a second Enter key press interrupts the agent for urgent input. The extension can also render diagrams and tables directly in chat that can be copied into Word or Excel.

For voice input inside the air-gapped network the developer replaced Whisper with GigaAM v3 from Sber, which transcribes 17 seconds of Russian speech in roughly one second on a standard CPU and inserts punctuation without requiring an internet connection after the initial model download.

Although the author considered forking the entire VS Code codebase like Cursor, the maintenance burden proved unsustainable. The final decision to ship an ordinary extension simplified both updates and internal security reviews, because many companies already allow Marketplace extensions and the extension communicates only with the internal LLM gateway.

Skycode is free and open source. The project page and GitHub repository are available for organizations that already run internal models such as Qwen or GigaChat and need an agent that respects strict context and data-residency constraints.