diff --git a/frontend/src/lib/components/copilot/chat/AIChatManager.svelte.ts b/frontend/src/lib/components/copilot/chat/AIChatManager.svelte.ts
index 940ee5e6d6..53cd319d55 100644
--- a/frontend/src/lib/components/copilot/chat/AIChatManager.svelte.ts
+++ b/frontend/src/lib/components/copilot/chat/AIChatManager.svelte.ts
@@ -480,7 +480,8 @@ class AIChatManager {
 						reply += token
 					},
 					onMessageEnd: () => {},
-					setToolStatus: () => {}
+					setToolStatus: () => {},
+					removeToolStatus: () => {}
 				},
 				systemMessage
 			}
@@ -680,6 +681,15 @@ class AIChatManager {
 							this.displayMessages.push(newMessage)
 						}
 					},
+					removeToolStatus: (id) => {
+						const existingIdx = this.displayMessages.findIndex(
+							(m) => m.role === 'tool' && m.tool_call_id === id
+						)
+						if (existingIdx !== -1) {
+							this.displayMessages.splice(existingIdx, 1)
+							this.displayMessages = [...this.displayMessages]
+						}
+					},
 					requestConfirmation: this.requestConfirmation
 				}
 			}
diff --git a/frontend/src/lib/components/copilot/chat/ToolExecutionDisplay.svelte b/frontend/src/lib/components/copilot/chat/ToolExecutionDisplay.svelte
index 4a417dad31..5db4f97857 100644
--- a/frontend/src/lib/components/copilot/chat/ToolExecutionDisplay.svelte
+++ b/frontend/src/lib/components/copilot/chat/ToolExecutionDisplay.svelte
@@ -12,7 +12,7 @@
 
 	let { message }: Props = $props()
 
-	let isExpanded = $state(message.showDetails || (message.isLoading && message.needsConfirmation))
+	let isExpanded = $derived(message.showDetails || (message.isLoading && message.needsConfirmation))
 
 	const hasParameters = $derived(
 		message.parameters !== undefined && Object.keys(message.parameters).length > 0
diff --git a/frontend/src/lib/components/copilot/chat/anthropic.ts b/frontend/src/lib/components/copilot/chat/anthropic.ts
index 645cc40644..b752cefd5c 100644
--- a/frontend/src/lib/components/copilot/chat/anthropic.ts
+++ b/frontend/src/lib/components/copilot/chat/anthropic.ts
@@ -14,6 +14,7 @@ import type {
 import type { MessageStream } from '@anthropic-ai/sdk/lib/MessageStream'
 import { getProviderAndCompletionConfig, workspaceAIClients } from '../lib'
 import { processToolCall, type Tool, type ToolCallbacks } from './shared'
+import { generateRandomString } from '$lib/utils'
 
 export async function getAnthropicCompletion(
 	messages: ChatCompletionMessageParam[],
@@ -60,6 +61,16 @@ export async function parseAnthropicCompletion(
 ): Promise<boolean> {
 	let toolCallsToProcess: ChatCompletionMessageFunctionToolCall[] = []
 	let error = null
+	let tempToolId: string | undefined = undefined
+
+	// When we receive a JSON input, we need to show a temporary tool call in loading state
+	completion.on('inputJson', (_: string) => {
+		if (!tempToolId) {
+			callbacks.onMessageEnd()
+			tempToolId = `temp-${generateRandomString(12)}`
+			callbacks.setToolStatus(tempToolId, { isLoading: true, content: 'Calling tool...' })
+		}
+	})
 
 	// Handle text streaming
 	completion.on('text', (textDelta: string, _textSnapshot: string) => {
@@ -75,6 +86,11 @@ export async function parseAnthropicCompletion(
 				addedMessages.push(assistantMessage)
 				callbacks.onMessageEnd()
 			} else if (block.type === 'tool_use') {
+				// Remove temp display if it exists
+				if (tempToolId) {
+					callbacks.removeToolStatus(tempToolId)
+				}
+
 				// Convert Anthropic tool calls to OpenAI format for compatibility
 				toolCallsToProcess.push({
 					id: block.id,
@@ -91,10 +107,17 @@ export async function parseAnthropicCompletion(
 				}
 			}
 		}
+
+		// Clear temp tracking after processing
+		tempToolId = undefined
 	})
 
 	// Handle errors
 	completion.on('error', (e: any) => {
+		if (tempToolId) {
+			callbacks.removeToolStatus(tempToolId)
+			tempToolId = undefined
+		}
 		console.error('Anthropic stream error:', e)
 		error = e
 	})
diff --git a/frontend/src/lib/components/copilot/chat/shared.ts b/frontend/src/lib/components/copilot/chat/shared.ts
index 6ab3cbfd31..655f44ddc0 100644
--- a/frontend/src/lib/components/copilot/chat/shared.ts
+++ b/frontend/src/lib/components/copilot/chat/shared.ts
@@ -269,7 +269,6 @@ export async function processToolCall<T>({
 		// Check if tool requires confirmation
 		const needsConfirmation = tool?.requiresConfirmation
 
-		// Add the tool to the display with appropriate status
 		toolCallbacks.setToolStatus(toolCall.id, {
 			...(tool?.requiresConfirmation
 				? { content: tool.confirmationMessage ?? 'Waiting for confirmation...' }
@@ -363,6 +362,7 @@ export interface Tool<T> {
 
 export interface ToolCallbacks {
 	setToolStatus: (id: string, metadata?: Partial<ToolDisplayMessage>) => void
+	removeToolStatus: (id: string) => void
 	requestConfirmation?: (toolId: string) => Promise<boolean>
 }
 
diff --git a/frontend/src/lib/components/copilot/lib.ts b/frontend/src/lib/components/copilot/lib.ts
index 7e18c29b14..e589f2d751 100644
--- a/frontend/src/lib/components/copilot/lib.ts
+++ b/frontend/src/lib/components/copilot/lib.ts
@@ -1,10 +1,5 @@
 import type { AIProvider, AIProviderModel } from '$lib/gen'
-import {
-	workspaceStore,
-	type DBSchema,
-	type GraphqlSchema,
-	type SQLSchema
-} from '$lib/stores'
+import { workspaceStore, type DBSchema, type GraphqlSchema, type SQLSchema } from '$lib/stores'
 import { buildClientSchema, printSchema } from 'graphql'
 import OpenAI from 'openai'
 import type {
@@ -213,16 +208,16 @@ function getModelSpecificConfig(
 		return {
 			...(modelProvider.model.endsWith('/thinking')
 				? {
-					thinking: {
-						type: 'enabled',
-						budget_tokens: 1024
-					},
-					model: modelProvider.model.slice(0, -9)
-				}
+						thinking: {
+							type: 'enabled',
+							budget_tokens: 1024
+						},
+						model: modelProvider.model.slice(0, -9)
+					}
 				: {
-					model: modelProvider.model,
-					temperature: 0
-				}),
+						model: modelProvider.model,
+						temperature: 0
+					}),
 			...(tools && tools.length > 0 ? { tools } : {}),
 			max_tokens: maxTokens
 		}
@@ -553,8 +548,8 @@ export function getProviderAndCompletionConfig<K extends boolean>({
 }): {
 	provider: AIProvider
 	config: K extends true
-	? ChatCompletionCreateParamsStreaming
-	: ChatCompletionCreateParamsNonStreaming
+		? ChatCompletionCreateParamsStreaming
+		: ChatCompletionCreateParamsNonStreaming
 } {
 	const modelProvider = forceModelProvider ?? getCurrentModel()
 	const providerConfig = PROVIDER_COMPLETION_CONFIG_MAP[modelProvider.provider]
@@ -612,13 +607,13 @@ export async function getNonStreamingCompletion(
 	}
 	const openaiClient = testOptions?.apiKey
 		? new OpenAI({
-			baseURL: `${location.origin}${OpenAPI.BASE}/ai/proxy`,
-			apiKey: 'fake-key',
-			defaultHeaders: {
-				Authorization: '' // a non empty string will be unable to access Windmill backend proxy
-			},
-			dangerouslyAllowBrowser: true
-		})
+				baseURL: `${location.origin}${OpenAPI.BASE}/ai/proxy`,
+				apiKey: 'fake-key',
+				defaultHeaders: {
+					Authorization: '' // a non empty string will be unable to access Windmill backend proxy
+				},
+				dangerouslyAllowBrowser: true
+			})
 		: workspaceAIClients.getOpenaiClient()
 
 	const completion = await openaiClient.chat.completions.create(config, fetchOptions)
@@ -797,6 +792,12 @@ export async function parseOpenAICompletion(
 					if (tool && tool.preAction) {
 						tool.preAction({ toolCallbacks: callbacks, toolId: toolCallId })
 					}
+
+					// Display tool call immediately in loading state
+					callbacks.setToolStatus(toolCallId, {
+						isLoading: true,
+						content: `Calling ${funcName} tool...`
+					})
 				}
 			}
 		}
diff --git a/frontend/src/lib/components/workspaceSettings/AISettings.svelte b/frontend/src/lib/components/workspaceSettings/AISettings.svelte
index 0c006b2c40..0a997fd43d 100644
--- a/frontend/src/lib/components/workspaceSettings/AISettings.svelte
+++ b/frontend/src/lib/components/workspaceSettings/AISettings.svelte
@@ -207,7 +207,7 @@
 						{#if provider === 'anthropic'}
 							<Badge color="blue">
 								Recommended
-								<Tooltip class="text-blue-800 dark:text-blue-800 mt-0.5">
+								<Tooltip>
 									Anthropic models handle tool calls better than other providers, which makes them a
 									better choice for AI chat.
 								</Tooltip>