VS Code wouldn’t have won the mid-2010s editor wars if it was closed source (note that VS Code has not helped MS ramp people up to VS itself). The winner of that war was always going to be an open source editor, it was just Microsoft whose concept won out. Closed source editors like Coda failed to gain traction and even Sublime Text fell eventually.

If MS ever decided to discontinue VS Code or relicense it, there would be blood in the water. I guarantee you there would be multiple compelling competitors in under a year and probably a new open source winner with consolidation in 5.

So to answer your question: they would be forking Atom (which I think would’ve won otherwise).

Zed's not a VSCode clone, and it's fantastic and OSS. They don't really have a business model that I see working though, IMO. I pay them purely because I love the editor, but the editor is free. The AI integration is what you pay for, but I just run claude code in a terminal.

every AI lab have cli for agent coding. you don't need VS Code. if you want coding agent to write code for you just use cli then use any IDE, text editor or whatever you prefer to review, edit or write code.

Sounds like cursor is not using vscode anymore in this release?

There's also Eclipse.