Updating 1.122 release notes for UBB

release-notes/v1_122.md

@@ -23,6 +23,8 @@ _Release date: May 28, 2026_
 
 Welcome to the 1.122 release of Visual Studio Code. This release further enhances the agent experience and makes BYOK more flexible, while adding new capabilities for testing web apps across different devices.
 
+* [Larger context windows](#1m-context-window-for-anthropic-and-openai-models): Support for 1M context windows for Anthropic and OpenAI models.
+
 * [Air-gapped BYOK](#use-byok-without-a-github-sign-in): Use your own language models, even when you're not connected.
 
 * [Browser device emulation](#emulate-devices): Test your website's responsiveness across different devices directly in the integrated browser.
@@ -46,6 +48,7 @@ To try new features as soon as possible, [**download the nightly Insiders build*
   <nav id="toc-nav">
     <div>In this update</div>
     <ul>
+      <li><a href="#usage-based-billing-with-github-ai-credits">GitHub Copilot moves to usage-based billing</a></li>
       <li><a href="#agents">Agents</a></li>
       <li><a href="#language-models">Language Models</a></li>
       <li><a href="#integrated-browser">Integrated browser</a></li>
@@ -58,6 +61,26 @@ To try new features as soon as possible, [**download the nightly Insiders build*
   <div class="notes-main">
 Navigation End -->
 
+## GitHub Copilot moves to usage based billing
+
+GitHub Copilot has moved to [usage-based billing](https://github.blog/news-insights/company-news/github-copilot-is-moving-to-usage-based-billing/).
+
+Under the new model, each interaction consumes AI credits, which are calculated based on token (input, output, and cached) cost and on the model used. Complex interactions and more capable models consume more credits, while lightweight models and simpler tasks use fewer. Learn more about how you can [optimize your usage](https://code.visualstudio.com/docs/copilot/guides/optimize-usage).
+
+### Updated Copilot status dashboard
+
+The Copilot status dashboard now reflects usage-based billing. You can view your AI credits consumption, so you can monitor your usage at a glance.
+
+![Screenshot showing the Copilot status dashboard](images/1_122/copilot-status-dashboard.png)
+
+### Model costs in the model picker
+
+The model picker now displays cost information to help you make informed model choices. Different models have different costs per token type, so choosing the right model for your task can help extend your usage.
+
+![Screenshot showing the model picker with cost information](images/1_122/update-model-picker.png)
+
+You can view all available models, their capabilities, context sizes, and billing details in the Language Models editor. Open it from the model picker by selecting ⚙️, or run the **Chat: Manage Language Models** command from the Command Palette.
+
 ## Agents
 
 ### Agents Window (Preview)
@@ -90,6 +113,14 @@ Based on feedback from Insiders users, terminal sandboxing now only applies when
 
 ## Language Models
 
+### 1M context window for Anthropic and OpenAI models
+
+VS Code now supports 1 million token context windows for compatible Anthropic and OpenAI models. This expanded context window enables you to work with significantly larger codebases and longer conversations without losing important context. The expanded context window is available when using supported models, such as Claude Opus 4.7 and GPT-5.5.
+
+![Screenshot showing extended context size options.](images/1_122/extended-context.png)
+
+> **Note**: Larger context windows may consume more tokens per interaction, which increases AI credits usage under [usage-based billing](#github-copilot-moves-to-usage-based-billing).
+
 ### Use BYOK without a GitHub sign in
 
 Previously, using your own language model API key in VS Code required signing in to GitHub. Now, [Bring Your Own Key (BYOK)](https://code.visualstudio.com/docs/copilot/customization/language-models#_bring-your-own-language-model-key) works without signing in, so you can use chat, tools, and MCP servers in air-gapped or restricted environments where GitHub sign-in isn't possible. This also enables fully offline workflows with local models like Ollama.