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The SQL Server Management Studio (SSMS) is always inserting a GO command whenever I am creating a query using the right-click "Script As" menu.

Why is this happening actually and what does GO actually do?

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GO is not a SQL keyword.

It is a batch separator used by the client tools (such as SSMS) to break the entire script up into batches.

As it is SQL Server Management Studio 2005 it appears that you can use GO with an int parameter, like below:

INSERT INTO mytable DEFAULT VALUES
GO 10

The above will insert 10 rows into mytable.

So GO will be executing the related SQL commands n times specified.

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