diff --git a/internal/services/toolkit/client/client_v2.go b/internal/services/toolkit/client/client_v2.go
index 8279b6bc..87a1e26a 100644
--- a/internal/services/toolkit/client/client_v2.go
+++ b/internal/services/toolkit/client/client_v2.go
@@ -35,8 +35,9 @@ func (a *AIClientV2) GetOpenAIClient(llmConfig *models.LLMProviderConfig) *opena
 	if Endpoint == "" {
 		if APIKey != "" {
 			// User provided their own API key, use the OpenAI-compatible endpoint
-			Endpoint = a.cfg.InferenceBaseURL + "/openai"
+			Endpoint = a.cfg.OpenAIBaseURL // standard openai base url
 		} else {
+			// suffix needed for cloudflare gateway
 			Endpoint = a.cfg.InferenceBaseURL + "/openrouter"
 		}
 	}
@@ -63,11 +64,37 @@ func NewAIClientV2(
 	logger *logger.Logger,
 ) *AIClientV2 {
 	database := db.Database("paperdebugger")
-	oaiClient := openai.NewClient(
-		option.WithBaseURL(cfg.InferenceBaseURL+"/openrouter"),
-		option.WithAPIKey(cfg.InferenceAPIKey),
+
+	llmProvider := &models.LLMProviderConfig{
+		APIKey: cfg.OpenAIAPIKey,
+	}
+
+	var baseUrl string
+	var apiKey string
+	var modelSlug string
+
+	// User specified their own API key, use the OpenAI-compatible endpoint
+	if llmProvider != nil && llmProvider.IsCustom() {
+		baseUrl = cfg.OpenAIBaseURL
+		apiKey = cfg.OpenAIAPIKey
+		modelSlug = "gpt-5-nano"
+		// Use the default inference endpoint
+	} else {
+		// suffix needed for cloudflare gateway
+		baseUrl = cfg.InferenceBaseURL + "/openrouter"
+		apiKey = cfg.InferenceAPIKey
+		modelSlug = "openai/gpt-5-nano"
+	}
+
+	CheckOpenAIWorksV2(
+		openai.NewClient(
+			option.WithBaseURL(baseUrl),
+			option.WithAPIKey(apiKey),
+		),
+		baseUrl,
+		modelSlug,
+		logger,
 	)
-	CheckOpenAIWorksV2(oaiClient, logger)
 
 	toolRegistry := initializeToolkitV2(db, projectService, cfg, logger)
 	toolCallHandler := handler.NewToolCallHandlerV2(toolRegistry)
diff --git a/internal/services/toolkit/client/utils_v2.go b/internal/services/toolkit/client/utils_v2.go
index e502cb21..c3ab40dd 100644
--- a/internal/services/toolkit/client/utils_v2.go
+++ b/internal/services/toolkit/client/utils_v2.go
@@ -87,13 +87,13 @@ func getDefaultParamsV2(modelSlug string, toolRegistry *registry.ToolRegistryV2)
 	}
 }
 
-func CheckOpenAIWorksV2(oaiClient openaiv3.Client, logger *logger.Logger) {
-	logger.Info("[AI Client V2] checking if openai client works")
+func CheckOpenAIWorksV2(oaiClient openaiv3.Client, baseUrl string, model string, logger *logger.Logger) {
+	logger.Info("[AI Client V2] checking if openai client works with " + baseUrl + " ..")
 	chatCompletion, err := oaiClient.Chat.Completions.New(context.TODO(), openaiv3.ChatCompletionNewParams{
 		Messages: []openaiv3.ChatCompletionMessageParamUnion{
 			openaiv3.UserMessage("Say 'openai client works'"),
 		},
-		Model: "openai/gpt-5-nano",
+		Model: model,
 	})
 	if err != nil {
 		logger.Errorf("[AI Client V2] openai client does not work: %v", err)
diff --git a/webapp/_webapp/src/views/settings/setting-text-input.tsx b/webapp/_webapp/src/views/settings/setting-text-input.tsx
index 893df676..e2fe2c00 100644
--- a/webapp/_webapp/src/views/settings/setting-text-input.tsx
+++ b/webapp/_webapp/src/views/settings/setting-text-input.tsx
@@ -3,6 +3,8 @@ import { Button, cn } from "@heroui/react";
 import { useSettingStore } from "../../stores/setting-store";
 import { Settings } from "../../pkg/gen/apiclient/user/v1/user_pb";
 import { PlainMessage } from "../../query/types";
+import { useConversationStore } from "../../stores/conversation/conversation-store";
+import { listSupportedModels } from "../../query/api";
 
 type SettingKey = keyof PlainMessage<Settings>;
 
@@ -27,6 +29,7 @@ export function createSettingsTextInput<K extends SettingKey>(settingKey: K) {
     password = false,
   }: SettingsTextInputProps) {
     const { settings, isUpdating, updateSettings } = useSettingStore();
+    const { setCurrentConversation } = useConversationStore();
     const [value, setValue] = useState<string>("");
     const [originalValue, setOriginalValue] = useState<string>("");
     const [isEditing, setIsEditing] = useState<boolean>(false);
@@ -43,11 +46,39 @@ export function createSettingsTextInput<K extends SettingKey>(settingKey: K) {
 
     const valueChanged = value !== originalValue;
 
+    // helper normalizes model by retrieving the model (assumed to be the last segment, if '/' present)
+    const normalizeModelId = (modelSlug: string) =>
+      modelSlug.toLowerCase().trim().split("/").filter(Boolean).pop()!;
+
     const saveSettings = useCallback(async () => {
       await updateSettings({ [settingKey]: value.trim() } as Partial<PlainMessage<Settings>>);
       setOriginalValue(value.trim());
       setIsEditing(false);
-    }, [value, updateSettings]); // settingKey is an outer scope value, not a dependency
+
+      // If openaiApiKey was updated, fetch new model list and update current model slug
+      if (settingKey === "openaiApiKey") {
+        const response = await listSupportedModels({});
+        if (response.models?.length) {
+          const { currentConversation: latest } = useConversationStore.getState();
+          // try to find a model that matches the current slug
+          // we don't do exact match but attempt exact suffix match (case insensitive); as per convention
+          // we don't assume any provided prefix (e.g. openai/, quen/) but fair to assume model name is suffix
+          const currentId = normalizeModelId(latest.modelSlug);
+          const matchingModel = response.models.find(m =>
+             normalizeModelId(m.name) === currentId
+          );
+          // fall back to the first model in the list
+          const newSlug = matchingModel?.slug ?? response.models[0].slug;
+
+          if (newSlug !== latest.modelSlug) {
+            setCurrentConversation({
+              ...latest,
+              modelSlug: newSlug,
+            });
+          }
+        }
+      }
+    }, [value, settingKey, updateSettings]); // settingKey is an outer scope value, not a dependency
 
     const handleEdit = useCallback(() => {
       setIsEditing(true);