A new startup, funded by Y Combinator, has launched a fork of VSCode and another open-source project called Continue. This move is part of a growing trend among developers to create forks of the popular code editor, VSCode, and enhance them with new features. The startup has successfully raised $500,000 from venture capitalists. There is a competitive atmosphere, described as a 'space race,' as many developers are working on their own forks, hoping to attract investment and user interest. Some industry observers note that Microsoft may eventually incorporate these improvements into the main VSCode product to boost sales of its Copilot tool.