Microsoft Intelligent Terminal 0.2 Adds Local Models, Multi-Agent Tabs

Microsoft introduced Intelligent Terminal as an experimental fork of Windows Terminal, releasing version 0.1 on May 29, 2026. The project integrates AI coding agents through the Agent Client Protocol while retaining familiar features including tabs, profiles, PowerShell and Windows Subsystem for Linux workflows. Its significance lies in making the terminal itself a control layer for agent-assisted development, allowing programmers to diagnose errors and delegate tasks without repeatedly switching tools.

The 0.2 update adds support for locally hosted AI models and connections to services including Ollama. Developers can run different agents, such as GitHub Copilot and Claude, in separate terminal tabs and configure agents to execute inside WSL Linux environments. Microsoft also improved automatic error detection and correction and added Token-usage information, giving users clearer visibility into consumption while several agents operate concurrently across Windows and Linux command-line sessions.