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I tried the same in my Linux terminal emulator, and it took 0.2s, when I added colors, 0.3s. That's 100x faster - maybe diff in VSCode means something different than running diff and printing the output? Did you include the time needed to open the files?

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Yes, the files themselves open quite quickly, but I will admit that it's a complicated diff (lots of expected differences), and VSCode is not primarily a diff tool.

But also 10k line file should be nothing for a modern PC.

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