diff --git a/ci/build/build-vscode.sh b/ci/build/build-vscode.sh
index fba95b31f7ef..7f4a14f0730d 100755
--- a/ci/build/build-vscode.sh
+++ b/ci/build/build-vscode.sh
@@ -107,6 +107,9 @@ main() {
 EOF
   ) > product.json
 
+
+  VSCODE_QUALITY=stable npm run gulp compile-copilot-extension-build
+
   npm run gulp core-ci
   npm run gulp "vscode-reh-web-$VSCODE_TARGET${MINIFY:+-min}-ci"
 
diff --git a/lib/vscode b/lib/vscode
index 41dd792b5e65..560a9dba96f9 160000
--- a/lib/vscode
+++ b/lib/vscode
@@ -1 +1 @@
-Subproject commit 41dd792b5e652393e7787322889ed5fdc58bd75b
+Subproject commit 560a9dba96f961efea7b1612916f89e5d5d4d679
diff --git a/patches/disable-builtin-ext-update.diff b/patches/disable-builtin-ext-update.diff
index 3a4e21bb5c88..20af3023a47c 100644
--- a/patches/disable-builtin-ext-update.diff
+++ b/patches/disable-builtin-ext-update.diff
@@ -8,7 +8,7 @@ Index: code-server/lib/vscode/src/vs/workbench/contrib/extensions/browser/extens
 --- code-server.orig/lib/vscode/src/vs/workbench/contrib/extensions/browser/extensionsWorkbenchService.ts
 +++ code-server/lib/vscode/src/vs/workbench/contrib/extensions/browser/extensionsWorkbenchService.ts
 @@ -342,6 +342,10 @@ export class Extension implements IExten
- 			if (this.type === ExtensionType.System && this.productService.quality === 'stable') {
+ 			if (this.type === ExtensionType.System && this.productService.quality === 'stable' && !this.productService.builtInExtensionsEnabledWithAutoUpdates?.some(id => id.toLowerCase() === this.identifier.id.toLowerCase())) {
  				return false;
  			}
 +			// Do not update builtin extensions.
diff --git a/patches/display-language.diff b/patches/display-language.diff
index ea28cf3f2529..d8e9c238a647 100644
--- a/patches/display-language.diff
+++ b/patches/display-language.diff
@@ -291,7 +291,7 @@ Index: code-server/lib/vscode/src/vs/workbench/contrib/extensions/browser/extens
  		}
  
  		// Prefers to run on UI
-@@ -2072,17 +2069,6 @@ export class SetLanguageAction extends E
+@@ -2242,17 +2239,6 @@ export class SetLanguageAction extends E
  	update(): void {
  		this.enabled = false;
  		this.class = SetLanguageAction.DisabledClass;
@@ -309,7 +309,7 @@ Index: code-server/lib/vscode/src/vs/workbench/contrib/extensions/browser/extens
  	}
  
  	override async run(): Promise<any> {
-@@ -2099,7 +2085,6 @@ export class ClearLanguageAction extends
+@@ -2269,7 +2255,6 @@ export class ClearLanguageAction extends
  	private static readonly DisabledClass = `${this.EnabledClass} disabled`;
  
  	constructor(
@@ -317,7 +317,7 @@ Index: code-server/lib/vscode/src/vs/workbench/contrib/extensions/browser/extens
  		@ILocaleService private readonly localeService: ILocaleService,
  	) {
  		super(ClearLanguageAction.ID, ClearLanguageAction.TITLE.value, ClearLanguageAction.DisabledClass, false);
-@@ -2109,17 +2094,6 @@ export class ClearLanguageAction extends
+@@ -2279,17 +2264,6 @@ export class ClearLanguageAction extends
  	update(): void {
  		this.enabled = false;
  		this.class = ClearLanguageAction.DisabledClass;
diff --git a/patches/sourcemaps.diff b/patches/sourcemaps.diff
index d1f477dfdfbe..43db8d208b49 100644
--- a/patches/sourcemaps.diff
+++ b/patches/sourcemaps.diff
@@ -32,7 +32,7 @@ Index: code-server/lib/vscode/build/gulpfile.reh.ts
  
  		let version = packageJson.version;
  		const quality = (product as typeof product & { quality?: string }).quality;
-@@ -501,7 +500,7 @@ function tweakProductForServerWeb(produc
+@@ -505,7 +504,7 @@ function tweakProductForServerWeb(produc
  	const minifyTask = task.define(`minify-vscode-${type}`, task.series(
  		bundleTask,
  		util.rimraf(`out-vscode-${type}-min`),
diff --git a/patches/update-check.diff b/patches/update-check.diff
index 56d5aa38a26d..372719a8e201 100644
--- a/patches/update-check.diff
+++ b/patches/update-check.diff
@@ -101,7 +101,7 @@ Index: code-server/lib/vscode/src/vs/base/common/product.ts
  
  	readonly version: string;
  	readonly date?: string;
-@@ -117,6 +118,7 @@ export interface IProductConfiguration {
+@@ -118,6 +119,7 @@ export interface IProductConfiguration {
  		readonly resourceUrlTemplate: string;
  		readonly nlsBaseUrl: string;
  		readonly accessSKUs?: string[];
diff --git a/test/e2e/models/CodeServer.ts b/test/e2e/models/CodeServer.ts
index d7f9a176c94a..4017445db752 100644
--- a/test/e2e/models/CodeServer.ts
+++ b/test/e2e/models/CodeServer.ts
@@ -77,11 +77,14 @@ export class CodeServer {
    */
   private async createWorkspace(): Promise<string> {
     const dir = await this.workspaceDir
-    await fs.mkdir(path.join(dir, "Machine"), { recursive: true })
+    await fs.mkdir(path.join(dir, "User"), { recursive: true })
     await fs.writeFile(
-      path.join(dir, "Machine/settings.json"),
+      path.join(dir, "User/settings.json"),
       JSON.stringify({
         "workbench.startupEditor": "none",
+        // Disable the welcome popup so we can avoid having to click through it
+        // on every test.
+        "workbench.welcomePage.experimentalOnboarding": false,
       }),
       "utf8",
     )