Make OpenAI-compatible API key optional for local codebase indexing

[Neonsy]

Context

This PR is triggered by a real user scenario discussed in Discord. With Codebase Indexing + OpenAI Compatible on local/self-hosted endpoints, leaving the API key empty caused broken runtime behavior even after settings were saved.

The reported symptoms were:

• indexing did not start when key was empty
• no embedding requests reached LM Studio
• UI state could show indexing as disabled/standby despite enabled settings
• runtime error: CodeIndexManager not initialized. Call initialize() first.

There were also activation/runtime messages in VS Code output (popoutButtonClicked already registered, missing activity bar container), but those are unrelated noise and not the indexing root cause.

Implementation

• UI/config behavior remains API-key-optional for OpenAI-compatible setups.
• OpenAI-compatible config modeling keeps apiKey optional, while requiring valid base URL + other required fields.
• OpenAI-compatible configuration is treated as configured when:
  • baseUrl is present
  • qdrantUrl is present
  • API key may be empty
• Service factory for OpenAI-compatible now:
  • still throws when options/base URL are missing
  • does not throw when API key is empty
  • passes empty string to embedder when unset
• OpenAI-compatible embedder now:
  • accepts empty/undefined API key
  • uses fallback "EMPTY" for SDK constructor compatibility
  • in direct full-endpoint fetch mode, sends auth headers with real key if present, otherwise fallback token ("EMPTY") so keyless local providers that still expect auth-shaped headers work
• Fixed code-index manager lifecycle regression:
  • service recreation is now triggered when manager is partially initialized, not only when _serviceFactory is missing
  • _serviceFactory is assigned only after successful full service recreation
  • prevents half-initialized state that produced CodeIndexManager not initialized
• Fixed webview indexing flow:
  • always calls initialize() before checking isFeatureEnabled/isFeatureConfigured on save/start paths
  • avoids stale flag checks and incorrect standby/disabled UI state
• Regression-focused tests were added/updated across:
  • embedder behavior and header behavior for empty API key
  • service factory contract for optional key
  • manager partial-initialization lifecycle regression
  • existing config/UI validation coverage remains aligned
• Added changeset for patch release notes.

How to Test

• Reproduce the initiating scenario:
  1. Open Codebase Indexing settings.
  2. Set Embedder Provider to OpenAI Compatible.
  3. Set Base URL to local LM Studio endpoint (for example http://127.0.0.1:1234/v1/embeddings).
  4. Leave API Key empty.
  5. Save and start indexing.
  6. Verify indexing transitions out of standby, no CodeIndexManager not initialized error appears, and LM Studio receives /v1/embeddings requests.
• Verify guardrails still hold:
  • Missing Base URL still fails validation/configuration.
  • Malformed Base URL still fails validation.
• Verify behavior split:
  • Keyless local endpoint: indexing starts and embedding calls are sent.
  • Key-required endpoint: providing API key continues to work normally.
• Run focused automated tests:
  • cd src && pnpm test services/code-index/embedders/__tests__/openai-compatible.spec.ts
  • cd src && pnpm test services/code-index/__tests__/manager.spec.ts
  • cd src && pnpm test services/code-index/__tests__/service-factory.spec.ts
  • cd src && pnpm test services/code-index/__tests__/config-manager.spec.ts
  • cd webview-ui && pnpm test src/components/chat/__tests__/CodeIndexPopover.validation.spec.ts
  • cd webview-ui && pnpm test src/components/chat/__tests__/CodeIndexPopover.spec.tsx
• Run full quality gates:
  • cd src && pnpm test
  • pnpm lint
  • pnpm check-types
  • pnpm build

[changeset-bot]

🦋 Changeset detected

Latest commit: 0759ea5

The changes in this PR will be included in the next version bump.

This PR includes changesets to release 1 package

Name	Type
kilo-code	Patch

Not sure what this means? Click here to learn what changesets are.

Click here if you're a maintainer who wants to add another changeset to this PR

[Neonsy]

Woops 😂
That wasn't the branch I wanted to redo 🥸

[Neonsy]

That fail seems to be a flaky time related error and has nothing to do with my changes

[Neonsy]

@kevinvandijk

[Neonsy]

The build has been tested by a Discord user using LM Studio

[SK4G]

The build has been tested by a Discord user using LM Studio

I can confirm it is working as expected as I am the said Discord user.

[kilo-code-bot]

SUGGESTION: Typo in comment — recwreation → recreation

Suggested change

	// Clear any error state after successful recwreation
	// Clear any error state after successful recreation

[kilo-code-bot]

Code Review Summary

Status: 1 Issue Found | Recommendation: Merge (minor suggestion only)

Overview

Severity	Count
CRITICAL	0
WARNING	0
SUGGESTION	1

Issue Details (click to expand)

SUGGESTION

File	Line	Issue
src/services/code-index/manager.ts	434	Pre-existing typo recwreation → recreation in comment

Review Notes

This PR makes the OpenAI-compatible API key optional for codebase indexing, enabling local/self-hosted embedding endpoints that don't require authentication. The changes are well-structured:

• Type safety: apiKey is properly typed as string | undefined in the constructor and normalized to string via (apiKey ?? "").trim() before storage
• Fallback pattern: Uses "EMPTY" as a dummy API key for the OpenAI SDK (which requires a non-empty string) — this is a reasonable workaround
• Atomicity improvement: _serviceFactory is now only assigned after all services are successfully created in _recreateServices(), preventing partial initialization states
• Partial init guard: needsServiceRecreation now also checks !this.isInitialized, catching cases where _serviceFactory exists but _orchestrator/_searchService are missing
• Validation schema: Correctly updated to make API key optional with z.string().optional() for the openai-compatible provider
• Test coverage: Comprehensive tests added across all layers (embedder, config manager, service factory, manager, and UI validation)

Files Reviewed (13 files)

• .changeset/openai-compatible-codeindex-optional-key.md - New changeset
• src/core/webview/webviewMessageHandler.ts - Simplified initialization flow
• src/services/code-index/__tests__/config-manager.spec.ts - New tests
• src/services/code-index/__tests__/manager.spec.ts - New regression test
• src/services/code-index/__tests__/service-factory.spec.ts - Updated tests
• src/services/code-index/config-manager.ts - Optional API key in config
• src/services/code-index/embedders/__tests__/openai-compatible.spec.ts - Updated/new tests
• src/services/code-index/embedders/openai-compatible.ts - Core change: optional API key with fallback
• src/services/code-index/interfaces/config.ts - Type change
• src/services/code-index/manager.ts - Atomicity & partial init improvements - 1 suggestion
• src/services/code-index/service-factory.ts - Updated factory
• webview-ui/src/components/chat/CodeIndexPopover.tsx - Validation schema update
• webview-ui/src/components/chat/__tests__/CodeIndexPopover.validation.spec.ts - New test file

Fix these issues in Kilo Cloud

[markijbema]

Hi! Thank you for taking the time to contribute to this project—we really appreciate it.

We are currently working on re-platforming the core of our VS Code and JetBrains extensions to be based on our new Kilo CLI, with a complete rebuild based on OpenCode as our new foundation, which means this PR unfortunately won't be compatible with the new architecture.

If you think this feature or fix is still relevant, we'd love for you to check out the new version and consider contributing it there. The new code is now in this repository. Alternatively, if you think this is an urgent fix to the old vscode extension (like a recent model change, or an urgent bug fix), we’d welcome the PR at https://github.com/Kilo-Org/kilocode-legacy