Microsoft's Intelligent Terminal Brings AI Agents to Windows Command Line

Microsoft has released Intelligent Terminal, an open-source fork of Windows Terminal that embeds AI agents directly into the command-line workflow without disrupting the active shell session. The new tool, described by Microsoft as a built-in assistant, can explain errors, draft commands, and troubleshoot issues without requiring developers to leave the terminal environment. On first run, users can select from multiple AI backends, including GitHub Copilot, Claude, Codex, and Gemini, with the agent rendering in a split pane beneath the standard PowerShell session.

Intelligent Terminal introduces three core capabilities that distinguish it from vanilla Windows Terminal. First, an automatic error detection toggle watches for failed commands, while a companion automatic error suggestion option pipes those failures directly to the selected AI model for remediation advice. Second, the terminal tracks active and past agent sessions, enabling users to resume prior conversations and return to previous work without losing context. Third, a configurable AI session manager sits on the right side of the window, exposing session controls and an agent status bar. During hands-on testing, Claude Code was able to plan multi-step coding tasks and prompt the user to choose between auto-accepting edits, approving each edit manually, or continuing to plan further changes.

The session management feature addresses a long-standing pain point for developers using tools like Claude Code. Standard Windows Terminal cannot natively restore AI agent sessions, forcing users to rely on Claude's built-in resume skill, which often degrades model performance. Intelligent Terminal closes that gap by maintaining a persistent record of agent conversations, and it also includes a toggle to reopen previously closed tabs. For organizations evaluating deployment, it is worth noting that enabling error-suggestion features means shell output, including potentially sensitive paths, credentials, and hostnames, is transmitted to third-party AI providers. Administrators should review data-handling policies before rolling this out across developer endpoints, and teams can audit their own exposure with a privacy checkup alongside a port scanner to confirm no additional network services are exposed by the tool. Developers who routinely embed API keys or tokens in shell history should also revalidate credential hygiene using a password checker before enabling automatic AI assistance.