The rise of Claude Code: history, setup & installation
From a late-2024 side project to a billion-dollar tool — the story of Claude Code, why it matters, and how to install it inside VS Code.
01From a side project to a billion-dollar tool
The phenomenon that is Claude Code began in late 2024, when Boris Cherny — an engineer at Anthropic — built a side project, originally called Claude CLI, just to drive coding with Claude in an agent loop. It took off from there.
Anthropic released it generally in April 2025 (available to most people from around February). It was the first time one of these CLI tools came out and truly took hold — there are dozens now, but Claude Code is where it began. Then in September 2025, V2 brought a whole robust ecosystem: checkpointing, sub-agents, hooks, skills and background tasks. Many features had rolled out over the preceding months but matured in V2. There's also a Claude Code SDK for writing code that works within the Claude Code ecosystem — not a general agent framework like the OpenAI Agents SDK, but a way to build on top of Claude Code itself.
In November 2025, Anthropic released Opus 4.5 — their strongest model, and what many see as an inflection point in agentic coding. Coming after it, Google's Gemini 3 Pro and OpenAI's Codex / GPT-5.2 land in the same tier — but Opus 4.5 was the first that had people saying something has changed: agents reliable enough to trust with real code, without checking every diff.
Around the same time, Anthropic passed $1 billion of run-rate revenue (ARR) with Claude Code — a real milestone. And as of January 2026, they released Cowork, which takes the same idea beyond coding. We won't cover Cowork here — this course is all about coding — but it's worth a look. Running alongside all of this is the story of MCP (the Model Context Protocol): it emerged in late 2024, took hold, and now sees 100 million downloads a month. MCP is a big part of the Claude Code ecosystem, and we'll cover it later.
Big things happen almost weekly, and it can feel overwhelming. The powerful, compelling tools are the ones that live for a few months. Claude Code has been around long enough for us to know it's here to stay.
02Pricing: what you actually need
Like most of these AIs, there are two ways to think about pricing — two different products. The API is for making repeated calls to build your own products (that's what we used with OpenRouter last week). The consumer subscription is for you as a user — and that's the plan we care about here.
| Plan | Price | What you get |
|---|---|---|
| Free | $0 | Just chatting with Claude, like ChatGPT. Not what we're using. |
| Pro | ~$20 / mo | Claude Code on the web and in your terminal — this is what the course uses. |
| Max | $100 or $200 / mo | Much higher limits for heavy daily use. Optional — most learners don't need it. |
You can pay nothing and still follow along — later today we'll set up free and very cheap models through Claude Code. But the experience is better on a paid model. If there's one thing worth investing in for this course, an Anthropic subscription might be it — cheaper than a laptop for an enormous amount of capability. Start free, and choose whether to add a paid model later.
03Install Claude Code in VS Code
Getting Claude Code onto your computer is genuinely simple — one line of code that the website generates for your operating system.
Sign in to Anthropic
Go to claude.ai, press Try Claude, and sign up (Google or email).
This is the account Claude Code will log in with.
Grab the install command
Go to code.claude.com — it redirects to the Claude Code site, which detects
your OS and shows the right one-line command. Click through for full docs if you want them.
Paste it into the VS Code terminal
In VS Code, open a terminal (Ctrl+`, or Ctrl/Cmd+J), paste the command, and press Enter. It installs Claude Code.
PC permissions?
If Windows complains you're not authorised to run scripts, search it or ask an assistant — it's the standard, harmless step to allow scripts. Once done, re-run the command.
# paste the one-line command from code.claude.com # ...installs, then: ✓ Claude Code installed — version 2.1.29 # your version may be newer — that's fine
04The extension vs. the terminal
We'll also install the Claude Code extension for VS Code. Open the Extensions panel (Ctrl/Cmd+Shift+X), search Claude Code — it's the top result, from Anthropic, with the verified tick and millions of downloads — and install it. Now there are two ways to use Claude Code inside VS Code:
More built-in, more constrained
Press the Claude button in the top bar to open it as a sidebar — like the Codex sidebar. It's more baked into VS Code and controls the editor a little better, but it's a more packaged, novice-friendly version without all the pro features.
The full-featured product
Run claude in the VS Code terminal. You keep the file explorer and VS Code
tooling around you, it's still aware it's inside VS Code — and you get the full-featured
Claude Code. This is what we use all week.
Week one was for sidebars and agent chats. This week we're becoming vibe engineers — so we work directly in the terminal to get the complete, unconstrained Claude Code experience.
✓ Key takeaways
- Claude Code began as Boris Cherny's late-2024 side project; general release April 2025, the V2 ecosystem in September 2025.
- Opus 4.5 (Nov 2025) was the inflection point — reliable enough to trust agents with real code; Anthropic passed $1B ARR on Claude Code.
- For the course you only need the Pro plan (~$20/mo) — and free/cheap model routes come later, so paying is optional.
- Install from
code.claude.comwith a single command pasted into the VS Code terminal. - Prefer the terminal CLI over the sidebar extension — it's the full-featured product.