The May 2026 VS Code update adds .mcp.json at the workspace level so teams can declare MCP servers alongside their code; when multiple configs exist, the most-specific one wins and duplicates are deduplicated by name. Copilot Business and Enterprise users can now supply their own API keys (OpenRouter, Ollama, Google, OpenAI) through a new Bring Your Own Language Model Key flow, decoupling model access from GitHub's model catalogue. Incremental chat rendering streams responses block-by-block rather than waiting for a complete reply. The MCP and BYOK additions are significant for teams that self-host models or run private MCP servers — workspace-scoped configuration eliminates per-developer setup drift and makes server declarations version-controllable. BYOK lowers the barrier for Business/Enterprise accounts that already hold contracts with other providers, though it introduces a new credential-management surface to audit.