Language models, such as GitHub Copilot, powered by OpenAI's Codex, represent a significant leap in software engineering, particularly in code generation and understanding. These AI-driven tools utilize advanced transformer architectures to assist developers by generating contextually relevant code, reducing development time, and improving productivity. This paper explores the capabilities of GitHub Copilot, analyzing its performance in real-world coding scenarios using metrics like BLEU score, functional accuracy, and human evaluation of readability. Additionally, the paper examines the algorithms underlying these models, such as self-attention mechanisms and large-scale pretraining on code datasets, and highlights their strengths and limitations in understanding complex codebases. Through case studies and comparative analysis with similar tools, this research underscores the transformative potential of language models in coding while addressing challenges like security risks, ethical concerns, and dependency issues. Visual representations of workflows, architecture, and evaluation metrics provide deeper insights into the efficacy of these models. This study concludes with recommendations for enhancing AI-assisted coding tools to better align with developer needs and ethical standards.