diff --git a/frontend/app/aipanel/aipanel-contextmenu.ts b/frontend/app/aipanel/aipanel-contextmenu.ts
index db6edc9577..a783af7a4c 100644
--- a/frontend/app/aipanel/aipanel-contextmenu.ts
+++ b/frontend/app/aipanel/aipanel-contextmenu.ts
@@ -3,23 +3,26 @@
 
 import { waveAIHasSelection } from "@/app/aipanel/waveai-focus-utils";
 import { ContextMenuModel } from "@/app/store/contextmenu";
+import { isDev } from "@/app/store/global";
 import { RpcApi } from "@/app/store/wshclientapi";
 import { TabRpcClient } from "@/app/store/wshrpcutil";
 import { WaveAIModel } from "./waveai-model";
 
-export async function handleWaveAIContextMenu(e: React.MouseEvent, onClose?: () => void): Promise<void> {
+export async function handleWaveAIContextMenu(e: React.MouseEvent, showCopy: boolean): Promise<void> {
     e.preventDefault();
     e.stopPropagation();
 
     const model = WaveAIModel.getInstance();
     const menu: ContextMenuItem[] = [];
 
-    const hasSelection = waveAIHasSelection();
-    if (hasSelection) {
-        menu.push({
-            role: "copy",
-        });
-        menu.push({ type: "separator" });
+    if (showCopy) {
+        const hasSelection = waveAIHasSelection();
+        if (hasSelection) {
+            menu.push({
+                role: "copy",
+            });
+            menu.push({ type: "separator" });
+        }
     }
 
     menu.push({
@@ -103,6 +106,19 @@ export async function handleWaveAIContextMenu(e: React.MouseEvent, onClose?: ()
             }
         );
     } else {
+        if (isDev()) {
+            maxTokensSubmenu.push({
+                label: "1k (Dev Testing)",
+                type: "checkbox",
+                checked: currentMaxTokens === 1024,
+                click: () => {
+                    RpcApi.SetRTInfoCommand(TabRpcClient, {
+                        oref: model.orefContext,
+                        data: { "waveai:maxoutputtokens": 1024 },
+                    });
+                },
+            });
+        }
         maxTokensSubmenu.push(
             {
                 label: "4k",
@@ -150,14 +166,16 @@ export async function handleWaveAIContextMenu(e: React.MouseEvent, onClose?: ()
         submenu: maxTokensSubmenu,
     });
 
-    menu.push({ type: "separator" });
+    if (model.canCloseWaveAIPanel()) {
+        menu.push({ type: "separator" });
 
-    menu.push({
-        label: "Hide Wave AI",
-        click: () => {
-            onClose?.();
-        },
-    });
+        menu.push({
+            label: "Hide Wave AI",
+            click: () => {
+                model.closeWaveAIPanel();
+            },
+        });
+    }
 
     ContextMenuModel.showContextMenu(menu, e);
-}
\ No newline at end of file
+}
diff --git a/frontend/app/aipanel/aipanel.tsx b/frontend/app/aipanel/aipanel.tsx
index 6ef092909d..1fb3c05ba4 100644
--- a/frontend/app/aipanel/aipanel.tsx
+++ b/frontend/app/aipanel/aipanel.tsx
@@ -203,11 +203,7 @@ const AIErrorMessage = memo(({ errorMessage, onClear }: AIErrorMessageProps) =>
 
 AIErrorMessage.displayName = "AIErrorMessage";
 
-interface AIPanelProps {
-    onClose?: () => void;
-}
-
-const AIPanelComponentInner = memo(({ onClose }: AIPanelProps) => {
+const AIPanelComponentInner = memo(() => {
     const [isDragOver, setIsDragOver] = useState(false);
     const [isReactDndDragOver, setIsReactDndDragOver] = useState(false);
     const [initialLoadDone, setInitialLoadDone] = useState(false);
@@ -256,10 +252,6 @@ const AIPanelComponentInner = memo(({ onClose }: AIPanelProps) => {
 
     // console.log("AICHAT messages", messages);
 
-    const handleClearChat = useCallback(() => {
-        model.clearChat();
-    }, [model]);
-
     const handleKeyDown = (waveEvent: WaveKeyboardEvent): boolean => {
         if (checkKeyPressed(waveEvent, "Cmd:k")) {
             model.clearChat();
@@ -493,7 +485,7 @@ const AIPanelComponentInner = memo(({ onClose }: AIPanelProps) => {
         >
             {(isDragOver || isReactDndDragOver) && <AIDragOverlay />}
             {showBlockMask && <AIBlockMask />}
-            <AIPanelHeader onClose={onClose} model={model} onClearChat={handleClearChat} />
+            <AIPanelHeader />
             <AIRateLimitStrip />
 
             <div key="main-content" className="flex-1 flex flex-col min-h-0">
@@ -504,7 +496,7 @@ const AIPanelComponentInner = memo(({ onClose }: AIPanelProps) => {
                         {messages.length === 0 && initialLoadDone ? (
                             <div
                                 className="flex-1 overflow-y-auto p-2"
-                                onContextMenu={(e) => handleWaveAIContextMenu(e, onClose)}
+                                onContextMenu={(e) => handleWaveAIContextMenu(e, true)}
                             >
                                 {model.inBuilder ? <AIBuilderWelcomeMessage /> : <AIWelcomeMessage />}
                             </div>
@@ -512,7 +504,7 @@ const AIPanelComponentInner = memo(({ onClose }: AIPanelProps) => {
                             <AIPanelMessages
                                 messages={messages}
                                 status={status}
-                                onContextMenu={(e) => handleWaveAIContextMenu(e, onClose)}
+                                onContextMenu={(e) => handleWaveAIContextMenu(e, true)}
                             />
                         )}
                         {errorMessage && (
@@ -529,10 +521,10 @@ const AIPanelComponentInner = memo(({ onClose }: AIPanelProps) => {
 
 AIPanelComponentInner.displayName = "AIPanelInner";
 
-const AIPanelComponent = ({ onClose }: AIPanelProps) => {
+const AIPanelComponent = () => {
     return (
         <ErrorBoundary>
-            <AIPanelComponentInner onClose={onClose} />
+            <AIPanelComponentInner />
         </ErrorBoundary>
     );
 };
diff --git a/frontend/app/aipanel/aipanelheader.tsx b/frontend/app/aipanel/aipanelheader.tsx
index d37287cb0d..d6b5d43cb2 100644
--- a/frontend/app/aipanel/aipanelheader.tsx
+++ b/frontend/app/aipanel/aipanelheader.tsx
@@ -1,38 +1,18 @@
 // Copyright 2025, Command Line Inc.
 // SPDX-License-Identifier: Apache-2.0
 
-import { ContextMenuModel } from "@/app/store/contextmenu";
+import { handleWaveAIContextMenu } from "@/app/aipanel/aipanel-contextmenu";
 import { useAtomValue } from "jotai";
 import { memo } from "react";
 import { WaveAIModel } from "./waveai-model";
 
-interface AIPanelHeaderProps {
-    onClose?: () => void;
-    model: WaveAIModel;
-    onClearChat?: () => void;
-}
-
-export const AIPanelHeader = memo(({ onClose, model, onClearChat }: AIPanelHeaderProps) => {
+export const AIPanelHeader = memo(() => {
+    const model = WaveAIModel.getInstance();
     const widgetAccess = useAtomValue(model.widgetAccessAtom);
     const inBuilder = model.inBuilder;
 
     const handleKebabClick = (e: React.MouseEvent) => {
-        const menu: ContextMenuItem[] = [
-            {
-                label: "New Chat",
-                click: () => {
-                    onClearChat?.();
-                },
-            },
-            { type: "separator" },
-            {
-                label: "Hide Wave AI",
-                click: () => {
-                    onClose?.();
-                },
-            },
-        ];
-        ContextMenuModel.showContextMenu(menu, e);
+        handleWaveAIContextMenu(e, false);
     };
 
     return (
diff --git a/frontend/app/aipanel/waveai-model.tsx b/frontend/app/aipanel/waveai-model.tsx
index 3daeb4872c..d19f890586 100644
--- a/frontend/app/aipanel/waveai-model.tsx
+++ b/frontend/app/aipanel/waveai-model.tsx
@@ -542,4 +542,18 @@ export class WaveAIModel {
             globalStore.set(this.restoreBackupStatus, "error");
         }
     }
+
+    canCloseWaveAIPanel(): boolean {
+        if (this.inBuilder) {
+            return false;
+        }
+        return true;
+    }
+
+    closeWaveAIPanel() {
+        if (this.inBuilder) {
+            return;
+        }
+        WorkspaceLayoutModel.getInstance().setAIPanelVisible(false);
+    }
 }
diff --git a/frontend/app/workspace/workspace.tsx b/frontend/app/workspace/workspace.tsx
index e624e5f2a4..3a74047462 100644
--- a/frontend/app/workspace/workspace.tsx
+++ b/frontend/app/workspace/workspace.tsx
@@ -58,7 +58,7 @@ const WorkspaceElem = memo(() => {
                     >
                         <Panel ref={aiPanelRef} collapsible defaultSize={initialAiPanelPercentage} order={1} className="overflow-hidden">
                             <div ref={aiPanelWrapperRef} className="w-full h-full">
-                                <AIPanel onClose={() => workspaceLayoutModel.setAIPanelVisible(false)} />
+                                <AIPanel />
                             </div>
                         </Panel>
                         <PanelResizeHandle className="w-0.5 bg-transparent hover:bg-gray-500/20 transition-colors" />