The video is a holiday edition of “Let It Cook” on the VS Code channel, focusing on the new feature called agent skills in VS Code and related tools. The hosts, including Harold and Tim, introduce agent skills as a way to enhance agentic development within VS Code by allowing agents to load specialized knowledge or workflows dynamically. Agent skills are essentially markdown files (skills.md) stored in specific folders that contain descriptions and instructions, enabling agents to pull in relevant context only when needed, thus optimizing the use of the model’s context window.

Harold explains that agent skills help manage the complexity of custom instructions by breaking down specialized knowledge into modular, reusable skill packages. These skills can include markdown documentation, scripts, images, or other resources that provide detailed guidance for specific tasks. Tim adds that this approach prevents the context window from being overloaded with irrelevant information, as skills are only loaded when their descriptions match the current task. This makes agent skills ideal for specialized workflows or routines that are not needed all the time, while custom instructions remain useful for broadly applicable guidelines.

The video demonstrates how agent skills work in practice, showing examples such as front-end design guidelines and video editing workflows. Harold showcases how to create and enable skills in VS Code Insiders, highlighting the ability to organize skills in user or project folders and how the agent decides when to apply them based on the skill descriptions. Tim then presents a practical use case in the Copilot CLI, where a video editing skill helps generate precise ffmpeg commands to cut video clips without common errors, illustrating how skills can improve task-specific accuracy without cluttering general instructions.

Further, Tim demonstrates the use of agent skills in the Copilot coding agent in the cloud, showing a migration skill that guides the agent through upgrading an API from Express.js to Fastify. This skill enforces a mandatory workflow, including benchmarking and validation steps, ensuring the migration is thorough and reliable. The cloud agent can run multiple tasks in parallel and integrates skills seamlessly, enabling complex workflows to be automated with confidence. The hosts also discuss how skills are discovered across different environments, including GitHub skills, Copilot skills, and Claude skills, ensuring wide compatibility and flexibility.

In conclusion, agent skills represent a significant advancement in how AI agents in VS Code and related tools manage knowledge and workflows. By modularizing specialized instructions into skills, users can maintain cleaner custom instructions and improve agent performance on specific tasks. The feature is currently available in VS Code Insiders and the Copilot CLI, with plans to integrate it into stable releases and expand organizational support. The video ends with encouragement to explore agent skills and a reminder of the vibrant community and ongoing development around AI-powered coding tools.