Continue in GitHub Codespaces ignores pre-populated config.json and still prompts for API key

[Passpot]

Before submitting your bug report

• [x] I've tried using the "Ask AI" feature on the Continue docs site to see if the docs have an answer
• [x] I believe this is a bug. I'll try to join the Continue Discord for questions
• [x] I'm not able to find an open issue that reports the same bug
• [x] I've seen the troubleshooting guide on the Continue Docs

Relevant environment info

- OS:
- Continue version:
- IDE version:
- Model:
- config:
  

  
  OR link to assistant in Continue hub:

Description

Codespaces OS: Ubuntu (default Codespaces container)

VS Code (web) in Codespaces

Continue extension: v0.9.4 (latest)

Model in config: OpenAI GPT-5

Codespaces secret: OPENAI_API_KEY

To reproduce

In a Codespaces project, create .devcontainer.json that writes the config before the extension starts:

{ "image": "mcr.microsoft.com/devcontainers/base:ubuntu", "postCreateCommand": "mkdir -p ~/.continue ./.continue && cat > ~/.continue/config.json <<EOF\n{\n "languageModels": {\n "defaultProvider": "openai",\n "providers": {\n "openai": {\n "apiKey": "$OPENAI_API_KEY",\n "model": "gpt-5",\n "apiBase": "https://api.openai.com/v1"\n }\n }\n }\n}\nEOF\ncp ~/.continue/config.json ./.continue/config.json" }

Start a fresh Codespace.

Verify both files exist and are correct:

cat ~/.continue/config.json cat ./.continue/config.json

Open Continue sidebar.

Expected:

“OpenAI” is pre-selected as the provider.

API key is loaded from config and ready to use without prompting.

Actual:

Continue still prompts to select a provider.

After selecting “OpenAI,” Continue prompts for API key again.

Notes:

Confirmed that both config files are correct before opening Continue.

Tried both JSON and YAML formats, in both $HOME/.continue/ and workspace .continue/.

Tried reloading the window after codespace creation — same result.

Behavior is consistent across sessions; seems the extension is not ingesting config on startup in Codespaces.

Questions:

In Codespaces, which path(s) does Continue check for config at startup?

Is there an environment variable or documented method to seed the provider/key without manual entry?

Is this expected behavior in remote/Codespaces environments, or a bug?

Log output

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