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Hi, I was trying to play with Pulumi Copilot VS Code extension. I thought it would be useful even in my case of a self-hosted backend (Amazon S3), but it always asks for login to Pulumi Cloud. Is it needed and really useful only in the case of managed solution?

Hi and thanks for trying the new Copilot extension. It is mainly designed to use the Copilot API that is available from Pulumi Cloud.

It is possible to reconfigure our extensions to use a <https://www.pulumi.com/docs/pulumi-cloud/admin/self-hosted/|self-hosted Pulumi Cloud>, if your organization has one. That said, I believe that Copilot API is not available in self-hosted at this time.  Also, note:
> Self-hosting is not the same thing as using a DIY backend to track state. To use an open source, DIY backend, such as a cloud storage bucket, see <https://www.pulumi.com/docs/concepts/state/|State and Backends>.