diff --git a/src/vs/workbench/contrib/inlineChat/browser/inlineChatLivePreviewWidget.ts b/src/vs/workbench/contrib/inlineChat/browser/inlineChatLivePreviewWidget.ts
index 0f153ca64da..2d2a2a7a5bb 100644
--- a/src/vs/workbench/contrib/inlineChat/browser/inlineChatLivePreviewWidget.ts
+++ b/src/vs/workbench/contrib/inlineChat/browser/inlineChatLivePreviewWidget.ts
@@ -170,9 +170,15 @@ export class InlineChatLivePreviewWidget extends ZoneWidget {
 			return;
 		}
 
-		// complex changes
-		this._logService.debug('[IE] livePreview-mode: full diff');
-		this._renderChangesWithFullDiff(changes, range);
+		if (changes.length === 0 || this._session.textModel0.getValueLength() === 0) {
+			// no change or changes to an empty file
+			this._logService.debug('[IE] livePreview-mode: no diff');
+			this._cleanupFullDiff();
+		} else {
+			// complex changes
+			this._logService.debug('[IE] livePreview-mode: full diff');
+			this._renderChangesWithFullDiff(changes, range);
+		}
 	}
 
 	// --- full diff
diff --git a/src/vs/workbench/contrib/inlineChat/browser/inlineChatStrategies.ts b/src/vs/workbench/contrib/inlineChat/browser/inlineChatStrategies.ts
index 76944f5b38e..5ffa49b8217 100644
--- a/src/vs/workbench/contrib/inlineChat/browser/inlineChatStrategies.ts
+++ b/src/vs/workbench/contrib/inlineChat/browser/inlineChatStrategies.ts
@@ -409,7 +409,7 @@ export class LivePreviewStrategy extends LiveStrategy {
 		}
 
 		if (response.singleCreateFileEdit) {
-			this._previewZone.value.showCreation(this._session.wholeRange.value, response.singleCreateFileEdit.uri, await Promise.all(response.singleCreateFileEdit.edits));
+			this._previewZone.value.showCreation(this._session.wholeRange.value.collapseToEnd(), response.singleCreateFileEdit.uri, await Promise.all(response.singleCreateFileEdit.edits));
 		} else {
 			this._previewZone.value.hide();
 		}