diff --git a/src/vs/workbench/contrib/inlineChat/browser/inlineChatStrategies.ts b/src/vs/workbench/contrib/inlineChat/browser/inlineChatStrategies.ts
index 1cd4bf8b8f3..0a2a25d23da 100644
--- a/src/vs/workbench/contrib/inlineChat/browser/inlineChatStrategies.ts
+++ b/src/vs/workbench/contrib/inlineChat/browser/inlineChatStrategies.ts
@@ -607,6 +607,7 @@ export class LiveStrategy3 extends EditModeStrategy {
 
 	private readonly _store: DisposableStore = new DisposableStore();
 	private readonly _sessionStore: DisposableStore = new DisposableStore();
+	private readonly _previewZone: Lazy<InlineChatFileCreatePreviewWidget>;
 
 	private readonly _ctxCurrentChangeHasDiff: IContextKey<boolean>;
 	private readonly _ctxCurrentChangeShowsDiff: IContextKey<boolean>;
@@ -631,6 +632,8 @@ export class LiveStrategy3 extends EditModeStrategy {
 		this._ctxCurrentChangeShowsDiff = CTX_INLINE_CHAT_CHANGE_SHOWS_DIFF.bindTo(contextKeyService);
 
 		this._modifiedRangesDecorations = this._editor.createDecorationsCollection();
+		this._previewZone = new Lazy(() => _instaService.createInstance(InlineChatFileCreatePreviewWidget, _editor));
+
 	}
 
 	override dispose(): void {
@@ -939,10 +942,10 @@ export class LiveStrategy3 extends EditModeStrategy {
 
 	override async renderChanges(response: ReplyResponse) {
 
-		if (response.untitledTextModel) {
-			this._zone.widget.showCreatePreview(response.untitledTextModel);
+		if (response.untitledTextModel && !response.untitledTextModel.isDisposed()) {
+			this._previewZone.value.showCreation(this._session.wholeRange.value.getStartPosition().delta(-1), response.untitledTextModel);
 		} else {
-			this._zone.widget.hideCreatePreview();
+			this._previewZone.value.hide();
 		}
 
 		return await this._showDiff(true, false);
diff --git a/src/vs/workbench/contrib/inlineChat/browser/inlineChatWidget.ts b/src/vs/workbench/contrib/inlineChat/browser/inlineChatWidget.ts
index 725461bced1..1a17f033998 100644
--- a/src/vs/workbench/contrib/inlineChat/browser/inlineChatWidget.ts
+++ b/src/vs/workbench/contrib/inlineChat/browser/inlineChatWidget.ts
@@ -569,7 +569,6 @@ export class InlineChatWidget {
 	}
 
 	updateToolbar(show: boolean) {
-		this._elements.extraToolbar.classList.toggle('hidden', !show);
 		this._elements.statusToolbar.classList.toggle('hidden', !show);
 		this._elements.feedbackToolbar.classList.toggle('hidden', !show);
 		this._elements.status.classList.toggle('actions', show);
@@ -582,6 +581,7 @@ export class InlineChatWidget {
 	setExtraButtons(buttons: IAction[]) {
 		const bar = this._instantiationService.createInstance(WorkbenchButtonBar, this._elements.extraToolbar, { telemetrySource: 'inlineChat' });
 		bar.update(buttons);
+		this._elements.extraToolbar.classList.toggle('hidden', buttons.length === 0);
 		this._extraButtonsCleanup.value = bar;
 	}