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So wait to be specific here -- is the setup that people develop on:

1. chrome-os device

2. install a debian VM

3. do all their development in a VM where they can easily install packages they need etc?

4. so they are doing dev in a VM on a core-i3 intel machine I guess?

Not exactly. There are some ways to install GNU/Linux distros on Chromebooks, the Eupnea project's Depthboot script[1], for example, lets users build/run a distro by extracting the rootfs from an ISO file, and apply Chromebook-specific patches, like using ChromeOS' kernel, using keyd to make patches to support the Chromebook keyboard's action keys, and much others.

(Disclaimer: I'm the current maintainer of the Eupnea project.)

[1]: https://github.com/eupnea-linux-backup/depthboot-builder

If the question is about Google, they use the Chromebooks to connect to cloud hosted dev environments. Often these days that's the internal cloud based IDE whose UI is VSCode based.

For many legacy command line tasks, you SSH to a cloud workstation. More than ever though, you can get away with a lot of programming tasks without ever touching a terminal.

For those who really want a traditional Linux Desktop environment, you use Chrome Remote Desktop to connect to the same cloud VM that you SSH to.

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