diff --git a/platform/client-ide/extensions/gcp-productos/package.json b/platform/client-ide/extensions/gcp-productos/package.json
index 3d458ce..cbd37cc 100644
--- a/platform/client-ide/extensions/gcp-productos/package.json
+++ b/platform/client-ide/extensions/gcp-productos/package.json
@@ -1,14 +1,41 @@
 {
   "name": "gcp-productos",
   "displayName": "GCP Product OS",
-  "description": "Product-centric IDE for launching and operating SaaS products on Google Cloud.",
-  "version": "0.1.0",
+  "description": "Product-centric IDE for launching and operating SaaS products on Google Cloud. Use @productos in chat!",
+  "version": "0.2.0",
   "publisher": "productos",
   "engines": { "vscode": "^1.90.0" },
-  "categories": ["Other"],
+  "categories": ["AI", "Chat", "Other"],
   "activationEvents": ["onStartupFinished"],
   "main": "./dist/extension.js",
   "contributes": {
+    "chatParticipants": [
+      {
+        "id": "productos.chat",
+        "fullName": "Product OS",
+        "name": "productos",
+        "description": "Deploy, analyze, and automate your SaaS product on Google Cloud",
+        "isSticky": true,
+        "commands": [
+          {
+            "name": "deploy",
+            "description": "Deploy a service to Cloud Run"
+          },
+          {
+            "name": "analytics",
+            "description": "Get funnel and conversion analytics"
+          },
+          {
+            "name": "marketing",
+            "description": "Generate marketing content"
+          },
+          {
+            "name": "status",
+            "description": "Check service status"
+          }
+        ]
+      }
+    ],
     "viewsContainers": {
       "activitybar": [
         {
@@ -20,12 +47,6 @@
     },
     "views": {
       "productos": [
-        {
-          "id": "productos.chat",
-          "type": "webview",
-          "name": "Chat",
-          "icon": "$(comment-discussion)"
-        },
         {
           "id": "productos.tools",
           "name": "Tools",
@@ -44,18 +65,13 @@
       }
     ],
     "commands": [
-      { "command": "productos.chat", "title": "Product OS: Open Chat", "icon": "$(comment-discussion)" },
       { "command": "productos.configure", "title": "Product OS: Configure Backend", "icon": "$(gear)" },
       { "command": "productos.refresh", "title": "Product OS: Refresh", "icon": "$(refresh)" },
       { "command": "productos.tools.list", "title": "Product OS: List Tools" },
       { "command": "productos.tools.invoke", "title": "Product OS: Invoke Tool", "icon": "$(play)" },
       { "command": "productos.tools.invokeFromTree", "title": "Invoke Tool", "icon": "$(play)" },
       { "command": "productos.runs.open", "title": "Product OS: Open Run" },
-      { "command": "productos.runs.openFromTree", "title": "View Run Details", "icon": "$(eye)" },
-      { "command": "productos.openPanel", "title": "Product OS: Open Panel" }
-    ],
-    "keybindings": [
-      { "command": "productos.chat", "key": "ctrl+shift+p", "mac": "cmd+shift+p", "when": "editorTextFocus" }
+      { "command": "productos.runs.openFromTree", "title": "View Run Details", "icon": "$(eye)" }
     ],
     "menus": {
       "view/title": [
diff --git a/platform/client-ide/extensions/gcp-productos/src/chatParticipant.ts b/platform/client-ide/extensions/gcp-productos/src/chatParticipant.ts
new file mode 100644
index 0000000..838976e
--- /dev/null
+++ b/platform/client-ide/extensions/gcp-productos/src/chatParticipant.ts
@@ -0,0 +1,223 @@
+import * as vscode from "vscode";
+import { getBackendUrl } from "./api";
+
+/**
+ * Product OS Chat Participant
+ * 
+ * Registers @productos in the native VS Code chat panel.
+ * Users can type "@productos deploy to staging" and get responses
+ * in the same UI as GitHub Copilot.
+ */
+
+// Chat response interface from Control Plane
+interface ChatResponse {
+  message: string;
+  toolCalls?: { name: string; arguments: any }[];
+  runs?: any[];
+  finishReason: string;
+}
+
+/**
+ * Register the Product OS chat participant
+ */
+export function registerChatParticipant(context: vscode.ExtensionContext) {
+  // Create the chat participant
+  const participant = vscode.chat.createChatParticipant(
+    "productos.chat",
+    chatHandler
+  );
+
+  // Set participant properties
+  participant.iconPath = vscode.Uri.joinPath(context.extensionUri, "media", "icon.svg");
+  
+  // Add follow-up provider for suggestions
+  participant.followupProvider = {
+    provideFollowups(
+      result: vscode.ChatResult,
+      context: vscode.ChatContext,
+      token: vscode.CancellationToken
+    ): vscode.ProviderResult<vscode.ChatFollowup[]> {
+      // Suggest follow-up actions based on what was just done
+      return [
+        { prompt: "Show me funnel analytics", label: "📊 Analytics" },
+        { prompt: "Deploy to staging", label: "🚀 Deploy" },
+        { prompt: "Generate marketing posts", label: "📣 Marketing" },
+        { prompt: "What drives conversions?", label: "📈 Drivers" }
+      ];
+    }
+  };
+
+  context.subscriptions.push(participant);
+
+  console.log("[Product OS] Chat participant @productos registered");
+}
+
+/**
+ * Handle chat requests
+ */
+async function chatHandler(
+  request: vscode.ChatRequest,
+  context: vscode.ChatContext,
+  response: vscode.ChatResponseStream,
+  token: vscode.CancellationToken
+): Promise<vscode.ChatResult> {
+  
+  const userPrompt = request.prompt;
+  console.log("[Product OS] Chat request:", userPrompt);
+
+  // Show progress
+  response.progress("Connecting to Product OS...");
+
+  try {
+    // Build message history from context
+    const messages = buildMessageHistory(context, userPrompt);
+
+    // Get code context if available
+    const codeContext = await getCodeContext();
+
+    // Call the Control Plane
+    const result = await callControlPlane(messages, codeContext);
+
+    // Handle tool calls
+    if (result.toolCalls && result.toolCalls.length > 0) {
+      for (const toolCall of result.toolCalls) {
+        response.markdown(`\n\n**🔧 Executing:** \`${toolCall.name}\`\n`);
+      }
+    }
+
+    // Handle runs (tool execution results)
+    if (result.runs && result.runs.length > 0) {
+      for (const run of result.runs) {
+        const status = run.status === "succeeded" ? "✅" : "❌";
+        response.markdown(`\n${status} **${run.tool}**\n`);
+        
+        if (run.output) {
+          response.markdown("\n```json\n" + JSON.stringify(run.output, null, 2) + "\n```\n");
+        }
+        
+        if (run.error) {
+          response.markdown(`\n**Error:** ${run.error.message}\n`);
+        }
+      }
+    }
+
+    // Stream the main response
+    if (result.message) {
+      response.markdown(result.message);
+    }
+
+    return { metadata: { command: "chat" } };
+
+  } catch (error: any) {
+    console.error("[Product OS] Chat error:", error);
+    
+    response.markdown(`\n\n❌ **Error:** ${error.message}\n\n`);
+    response.markdown("Make sure the Control Plane is running at " + getBackendUrl());
+    
+    return { 
+      metadata: { command: "error" },
+      errorDetails: { message: error.message }
+    };
+  }
+}
+
+/**
+ * Build message history from chat context
+ */
+function buildMessageHistory(
+  context: vscode.ChatContext,
+  currentPrompt: string
+): { role: string; content: string }[] {
+  const messages: { role: string; content: string }[] = [];
+
+  // Add previous messages from context
+  for (const turn of context.history) {
+    if (turn instanceof vscode.ChatRequestTurn) {
+      messages.push({ role: "user", content: turn.prompt });
+    } else if (turn instanceof vscode.ChatResponseTurn) {
+      // Extract text from response
+      let text = "";
+      for (const part of turn.response) {
+        if (part instanceof vscode.ChatResponseMarkdownPart) {
+          text += part.value.value;
+        }
+      }
+      if (text) {
+        messages.push({ role: "assistant", content: text });
+      }
+    }
+  }
+
+  // Add current prompt
+  messages.push({ role: "user", content: currentPrompt });
+
+  return messages;
+}
+
+/**
+ * Get context from the active editor
+ */
+async function getCodeContext(): Promise<any | undefined> {
+  const editor = vscode.window.activeTextEditor;
+  if (!editor) return undefined;
+
+  const selection = editor.selection;
+  const selectedText = editor.document.getText(selection);
+
+  if (selectedText) {
+    return {
+      selection: {
+        path: vscode.workspace.asRelativePath(editor.document.uri),
+        text: selectedText,
+        startLine: selection.start.line + 1
+      }
+    };
+  }
+
+  // No selection - include some context from the current file
+  const document = editor.document;
+  const cursorLine = selection.active.line;
+  const startLine = Math.max(0, cursorLine - 20);
+  const endLine = Math.min(document.lineCount - 1, cursorLine + 20);
+  
+  const range = new vscode.Range(startLine, 0, endLine, document.lineAt(endLine).text.length);
+  const surroundingCode = document.getText(range);
+
+  if (surroundingCode.trim()) {
+    return {
+      files: [{
+        path: vscode.workspace.asRelativePath(editor.document.uri),
+        content: surroundingCode
+      }]
+    };
+  }
+
+  return undefined;
+}
+
+/**
+ * Call the Control Plane chat endpoint
+ */
+async function callControlPlane(
+  messages: { role: string; content: string }[],
+  context?: any
+): Promise<ChatResponse> {
+  const backendUrl = getBackendUrl();
+  
+  const response = await fetch(`${backendUrl}/chat`, {
+    method: "POST",
+    headers: { "Content-Type": "application/json" },
+    body: JSON.stringify({
+      messages,
+      context,
+      autoExecuteTools: true
+    })
+  });
+
+  if (!response.ok) {
+    const text = await response.text();
+    throw new Error(`Control Plane error: ${response.status} - ${text}`);
+  }
+
+  return response.json();
+}
diff --git a/platform/client-ide/extensions/gcp-productos/src/extension.ts b/platform/client-ide/extensions/gcp-productos/src/extension.ts
index d8f804a..7433f29 100644
--- a/platform/client-ide/extensions/gcp-productos/src/extension.ts
+++ b/platform/client-ide/extensions/gcp-productos/src/extension.ts
@@ -4,30 +4,24 @@ import { ToolsTreeProvider, ToolItem } from "./toolsTreeView";
 import { RunsTreeProvider, RunItem } from "./runsTreeView";
 import { createStatusBar, updateConnectionStatus, dispose as disposeStatusBar } from "./statusBar";
 import { InvokePanel } from "./invokePanel";
-import { ChatPanel } from "./chatPanel";
-import { ChatViewProvider } from "./chatViewProvider";
 import { showJson, openRun, showRunDocument } from "./ui";
+import { registerChatParticipant } from "./chatParticipant";
 
 export function activate(context: vscode.ExtensionContext) {
   console.log("Product OS extension activated");
 
+  // Register @productos in the native VS Code chat
+  // This gives us the Copilot-like chat experience for FREE
+  try {
+    registerChatParticipant(context);
+  } catch (e) {
+    console.log("[Product OS] Chat Participant API not available (requires VS Code 1.90+)");
+  }
+
   // Create tree providers
   const toolsProvider = new ToolsTreeProvider();
   const runsProvider = new RunsTreeProvider();
 
-  // Register sidebar Chat view provider
-  const chatViewProvider = new ChatViewProvider(context.extensionUri);
-  context.subscriptions.push(
-    vscode.window.registerWebviewViewProvider(ChatViewProvider.viewType, chatViewProvider)
-  );
-
-  // Register Chat panel command (opens in editor area)
-  context.subscriptions.push(
-    vscode.commands.registerCommand("productos.chat", () => {
-      ChatPanel.createOrShow(context.extensionUri);
-    })
-  );
-
   // Register tree views
   vscode.window.registerTreeDataProvider("productos.tools", toolsProvider);
   vscode.window.registerTreeDataProvider("productos.runs", runsProvider);