@dmehers The issue others have seen is that the OS Setting "Apple Intelligence" must be turned on. Other requirements are a Silicon Mac and latest MacOS 26. For some regions "Apple Intelligence" is not available. "Apple Intelligence must be turned on before launching Xcode to use coding intelligence features. (152533281)" https://developer.apple.com/forums/thread/844711?answerId=906189022#906189022 lists a workaround

@Amer1go that stinks you can try setting up a local LLM using a custom agent. How much ram do you have? There are some cloud LLM providers but I have no experience with them. I use oLMX to run open-source LLM's from HuggingFace and use OpenCode as the agent. Also please file a feed back Apple should not be blocking this Important Xcode feature.

@Amer1go Yes this is your problem Xcode Agents require the OS Setting Apple Intelligence to be enabled. Google list macOS 26.1 as required for Xcode Agents but I can't find that in Apples Docs anywhere. MacOS Apple Intelligence was introduced in macOS 26. I remember having to run the Beta OS to use the new Xcode Intelligence features in Xcode 26.

I have OpenCode working now see the setup details here

In Xcode Settings select Components, Scroll down to "Other Components" and then click the "Get" button for the AI Agent you use.

Creating a behavior is no longer needed in Xcode 27 beta 4. The file navigator context menu now has the action "Open Terminal at Location".