diff --git a/webui/src/components/thread/ModelPresetBadge.tsx b/webui/src/components/thread/ModelPresetBadge.tsx
index 224610ee3..de0dbc5bc 100644
--- a/webui/src/components/thread/ModelPresetBadge.tsx
+++ b/webui/src/components/thread/ModelPresetBadge.tsx
@@ -533,6 +533,7 @@ function PresetPill({
   return (
     <span
       data-fallback={fallbackModelName ? "true" : undefined}
+      data-needs-setup={needsSetup ? "true" : undefined}
       data-preset-offset={offset}
       title={fallbackTitle || undefined}
       className={cn(
@@ -540,6 +541,7 @@ function PresetPill({
         "w-fit",
         "transition-[color,background-color,border-color,transform] duration-150 ease-out group-focus-visible:ring-2 group-focus-visible:ring-ring/45",
         isHero ? "gap-1.5 px-2.5 text-[12px]" : "gap-2 px-3 text-[12.5px]",
+        needsSetup && "composer-model-pill-setup",
         offset !== undefined && "composer-model-pill-dock",
       )}
       style={scale === undefined ? undefined : {
@@ -564,7 +566,26 @@ function PresetPill({
           labelOverflows && "thread-composer-model-label-fade",
         )}
       >
-        {label}
+        {needsSetup ? <SetupPromptLabel label={label} /> : label}
+      </span>
+    </span>
+  );
+}
+
+function SetupPromptLabel({ label }: { label: string }) {
+  const separator = label.indexOf(" ");
+  if (separator < 0) {
+    return <span className="text-foreground/80">{label}</span>;
+  }
+
+  return (
+    <span data-testid="composer-model-setup-label">
+      <span className="text-muted-foreground/90 transition-colors duration-150 group-hover:text-muted-foreground motion-reduce:transition-none">
+        {label.slice(0, separator)}
+      </span>
+      {" "}
+      <span className="text-foreground/80 transition-colors duration-150 group-hover:text-foreground/90 motion-reduce:transition-none">
+        {label.slice(separator + 1)}
       </span>
     </span>
   );
diff --git a/webui/src/globals.css b/webui/src/globals.css
index cd7b7d9c1..a83f98c0a 100644
--- a/webui/src/globals.css
+++ b/webui/src/globals.css
@@ -735,6 +735,36 @@
   transform: scale(0.98);
 }
 
+.composer-model-pill-setup {
+  border-color: hsl(var(--border) / 0.72);
+  box-shadow:
+    inset 0 1px 0 rgb(255 255 255 / 0.62),
+    0 1px 2px hsl(var(--foreground) / 0.035);
+  transition-property: color, background-color, border-color, box-shadow, transform;
+  transition-duration: 180ms;
+  transition-timing-function: cubic-bezier(0.2, 0.8, 0.2, 1);
+}
+
+.dark .composer-model-pill-setup {
+  box-shadow:
+    inset 0 1px 0 rgb(255 255 255 / 0.045),
+    0 1px 2px rgb(0 0 0 / 0.12);
+}
+
+.thread-composer-model-badge:hover > .composer-model-pill-setup {
+  border-color: hsl(var(--border));
+  background-color: hsl(var(--accent) / 0.7);
+  box-shadow:
+    inset 0 1px 0 rgb(255 255 255 / 0.72),
+    0 2px 5px hsl(var(--foreground) / 0.06);
+}
+
+.dark .thread-composer-model-badge:hover > .composer-model-pill-setup {
+  box-shadow:
+    inset 0 1px 0 rgb(255 255 255 / 0.07),
+    0 2px 5px rgb(0 0 0 / 0.16);
+}
+
 @keyframes composer-model-pill-viewport-enter {
   from {
     transform: scale(0.9074);
@@ -783,6 +813,10 @@
     transform: none !important;
   }
 
+  .composer-model-pill-setup {
+    transition: none;
+  }
+
   .composer-model-pill-track[data-settling="true"],
   .composer-model-pill-dock {
     transition: none;
diff --git a/webui/src/tests/thread-shell.test.tsx b/webui/src/tests/thread-shell.test.tsx
index 67905a92e..cca9cb52a 100644
--- a/webui/src/tests/thread-shell.test.tsx
+++ b/webui/src/tests/thread-shell.test.tsx
@@ -876,6 +876,10 @@ describe("ThreadShell", () => {
 
     const badge = await screen.findByRole("button", { name: "Choose your AI" });
     expect(screen.queryByTestId("composer-model-setup-icon")).not.toBeInTheDocument();
+    expect(badge.querySelector('[data-needs-setup="true"]')).toHaveClass(
+      "composer-model-pill-setup",
+    );
+    expect(screen.getByTestId("composer-model-setup-label")).toHaveTextContent("Choose your AI");
     expect(badge).not.toHaveClass("border-amber-500/35");
     expect(screen.queryByTestId("composer-model-logo-openai_codex")).not.toBeInTheDocument();
     fireEvent.click(badge);