diff --git a/apps/web/src/components/chat/ThreadErrorBanner.browser.test.tsx b/apps/web/src/components/chat/ThreadErrorBanner.browser.test.tsx
new file mode 100644
index 0000000000000..3a8b3d951bff9
--- /dev/null
+++ b/apps/web/src/components/chat/ThreadErrorBanner.browser.test.tsx
@@ -0,0 +1,38 @@
+import "../../index.css";
+
+import { act } from "react";
+import { createRoot } from "react-dom/client";
+import { expect, it, vi } from "vite-plus/test";
+import { page } from "vite-plus/test/browser";
+
+import { ThreadErrorBanner } from "./ThreadErrorBanner";
+
+it("expands even a short JSON error to its exact diagnostics and collapses back to its message", async () => {
+  vi.stubGlobal("IS_REACT_ACT_ENVIRONMENT", true);
+  const container = document.createElement("div");
+  document.body.append(container);
+  const root = createRoot(container);
+  const error = '  {"error": {"message":"Turn failed", "code":"unsupported_value"}}\t ';
+
+  try {
+    await act(async () => root.render(<ThreadErrorBanner error={error} />));
+
+    await expect.element(page.getByText("Turn failed", { exact: true })).toBeVisible();
+    expect(container.textContent).not.toContain("unsupported_value");
+
+    await act(async () => page.getByRole("button", { name: "Show full error" }).click());
+
+    const diagnostics = page.getByText(error, { exact: true });
+    await expect.element(diagnostics).toBeVisible();
+    expect(diagnostics.element().textContent).toBe(error);
+
+    await act(async () => page.getByRole("button", { name: "Show less" }).click());
+
+    await expect.element(page.getByText("Turn failed", { exact: true })).toBeVisible();
+    expect(container.textContent).not.toContain("unsupported_value");
+  } finally {
+    await act(async () => root.unmount());
+    container.remove();
+    vi.unstubAllGlobals();
+  }
+});
diff --git a/apps/web/src/components/chat/ThreadErrorBanner.test.tsx b/apps/web/src/components/chat/ThreadErrorBanner.test.tsx
index 418fdf0adb5b1..d603dc8530e3f 100644
--- a/apps/web/src/components/chat/ThreadErrorBanner.test.tsx
+++ b/apps/web/src/components/chat/ThreadErrorBanner.test.tsx
@@ -3,10 +3,41 @@ import { describe, expect, it } from "vite-plus/test";
 import {
   dismissThreadErrorBannerForSession,
   getThreadErrorBannerKey,
+  getThreadErrorBannerMessage,
   isThreadErrorBannerDismissedForSession,
   shouldShowThreadErrorBanner,
 } from "./ThreadErrorBanner";
 
+describe("getThreadErrorBannerMessage", () => {
+  it("extracts a readable nested message without trimming its whitespace", () => {
+    const message =
+      "  This model is not supported with a ChatGPT account.\nChoose another model.  ";
+    const error = ` \n${JSON.stringify({ error: { message, code: "unsupported_model" } })}\t `;
+
+    expect(getThreadErrorBannerMessage(error)).toBe(message);
+  });
+
+  it.each([
+    ["plain text", "  Could not start the turn.\nTry again.  "],
+    ["invalid JSON", '{"error":{"message":"Cut off"'],
+    ["an unfamiliar shape", '{"message":"Top-level message","status":400}'],
+  ])("leaves %s unchanged", (_description, error) => {
+    expect(getThreadErrorBannerMessage(error)).toBe(error);
+  });
+
+  it("keeps the diagnostics when the nested message is blank", () => {
+    const error = JSON.stringify({ error: { message: " \n\t ", code: "unsupported_model" } });
+
+    expect(getThreadErrorBannerMessage(error)).toBe(error);
+  });
+
+  it("does not recursively unwrap the selected message", () => {
+    const message = JSON.stringify({ error: { message: "Inner message" } });
+
+    expect(getThreadErrorBannerMessage(JSON.stringify({ error: { message } }))).toBe(message);
+  });
+});
+
 describe("ThreadErrorBanner", () => {
   it("stays hidden after its current error is dismissed", () => {
     const bannerKey = getThreadErrorBannerKey("env:thread-a", "Aborted");
@@ -21,15 +52,19 @@ describe("ThreadErrorBanner", () => {
     ).toBe(false);
   });
 
-  it("reappears when a new error arrives on the same thread", () => {
-    dismissThreadErrorBannerForSession(getThreadErrorBannerKey("env:thread-b", "Turn failed"));
-    const newErrorKey = getThreadErrorBannerKey("env:thread-b", "Provider crashed");
+  it("reappears for different diagnostics with the same headline on the same thread", () => {
+    const firstError = JSON.stringify({ error: { message: "Turn failed", code: "first" } });
+    const secondError = JSON.stringify({ error: { message: "Turn failed", code: "second" } });
+    const dismissedKey = getThreadErrorBannerKey("env:thread-b", firstError);
+    dismissThreadErrorBannerForSession(dismissedKey);
+    const newErrorKey = getThreadErrorBannerKey("env:thread-b", secondError);
 
+    expect(isThreadErrorBannerDismissedForSession(dismissedKey)).toBe(true);
     expect(isThreadErrorBannerDismissedForSession(newErrorKey)).toBe(false);
     expect(
       shouldShowThreadErrorBanner(
         "env:thread-b",
-        "Provider crashed",
+        secondError,
         isThreadErrorBannerDismissedForSession(newErrorKey),
       ),
     ).toBe(true);
diff --git a/apps/web/src/components/chat/ThreadErrorBanner.tsx b/apps/web/src/components/chat/ThreadErrorBanner.tsx
index 54f65238687b6..198fbb687c61b 100644
--- a/apps/web/src/components/chat/ThreadErrorBanner.tsx
+++ b/apps/web/src/components/chat/ThreadErrorBanner.tsx
@@ -7,6 +7,25 @@ import { OpenAI } from "../Icons";
 import { ChatGptUsageButton } from "../settings/ChatGptUsageButton";
 import { ExpandableText } from "../settings/ExpandableText";
 
+export function getThreadErrorBannerMessage(error: string): string {
+  let payload: unknown;
+  try {
+    payload = JSON.parse(error);
+  } catch {
+    return error;
+  }
+  if (typeof payload !== "object" || payload === null || !("error" in payload)) {
+    return error;
+  }
+  const nestedError = payload.error;
+  if (typeof nestedError !== "object" || nestedError === null || !("message" in nestedError)) {
+    return error;
+  }
+  return typeof nestedError.message === "string" && nestedError.message.trim().length > 0
+    ? nestedError.message
+    : error;
+}
+
 export function getThreadErrorBannerKey(threadKey: string, error: string | null): string | null {
   return error === null ? null : `${threadKey}\u0000${error}`;
 }
@@ -59,7 +78,7 @@ export const ThreadErrorBanner = memo(function ThreadErrorBanner({
               <p>Review your usage settings in ChatGPT to continue.</p>
             </div>
           ) : (
-            <ExpandableText text={error} />
+            <ExpandableText text={error} collapsedText={getThreadErrorBannerMessage(error)} />
           )}
         </AlertDescription>
         {(chatGptUsageLimit || onDismiss) && (
diff --git a/apps/web/src/components/settings/ExpandableText.tsx b/apps/web/src/components/settings/ExpandableText.tsx
index f0452eeb1eb83..a30d6f22eb768 100644
--- a/apps/web/src/components/settings/ExpandableText.tsx
+++ b/apps/web/src/components/settings/ExpandableText.tsx
@@ -5,18 +5,20 @@ import { cn } from "../../lib/utils";
 
 export function ExpandableText({
   text,
+  collapsedText = text,
   className,
   collapsedClassName = "line-clamp-3",
   expandLabel = "Show full error",
 }: {
   text: string;
+  collapsedText?: string;
   className?: string;
   collapsedClassName?: string;
   expandLabel?: string;
 }) {
   const textId = useId();
   const [expanded, setExpanded] = useState(false);
-  const canExpand = text.length > 180 || text.includes("\n");
+  const canExpand = collapsedText !== text || text.length > 180 || text.includes("\n");
 
   return (
     <div className={cn("min-w-0", className)}>
@@ -27,7 +29,7 @@ export function ExpandableText({
           !expanded && canExpand ? collapsedClassName : null,
         )}
       >
-        {text}
+        {expanded ? text : collapsedText}
       </div>
       {canExpand ? (
         <InlineButton