diff --git a/packages/openui-cli/package.json b/packages/openui-cli/package.json
index 77bf982d1..3c810e859 100644
--- a/packages/openui-cli/package.json
+++ b/packages/openui-cli/package.json
@@ -1,6 +1,6 @@
 {
   "name": "@openuidev/cli",
-  "version": "0.1.8",
+  "version": "0.1.9",
   "description": "CLI for OpenUI — scaffold generative UI chat apps and generate LLM system prompts from component libraries",
   "bin": {
     "openui": "dist/index.js"
diff --git a/packages/openui-cli/src/templates/openui-cloud/src/components/cloud-chat.tsx b/packages/openui-cli/src/templates/openui-cloud/src/components/cloud-chat.tsx
index 337f5c9f6..d482cc1a3 100644
--- a/packages/openui-cli/src/templates/openui-cloud/src/components/cloud-chat.tsx
+++ b/packages/openui-cli/src/templates/openui-cloud/src/components/cloud-chat.tsx
@@ -1,9 +1,9 @@
 "use client";
 
+import { usePersistedModel } from "@/hooks/use-persisted-model";
 import { useTheme } from "@/hooks/use-system-theme";
 import { shouldShowBillingCreditsNotice } from "@/lib/billing";
 import { createCloudChatLLM } from "@/lib/cloud-chat-llm";
-import { DEFAULT_MODEL } from "@/lib/models";
 import { defineArtifactCategories } from "@openuidev/react-headless";
 import { AgentInterface } from "@openuidev/react-ui";
 import {
@@ -25,7 +25,7 @@ const showBillingCreditsNotice = shouldShowBillingCreditsNotice();
 
 export function CloudChat() {
   const mode = useTheme();
-  const [selectedModel, setSelectedModel] = useState(DEFAULT_MODEL);
+  const [selectedModel, setSelectedModel] = usePersistedModel();
   const [billingDialogOpen, setBillingDialogOpen] = useState(false);
   const [billingCreditsRequired, setBillingCreditsRequired] = useState(false);
   const [llm] = useState(() =>
@@ -54,7 +54,7 @@ export function CloudChat() {
   const handleModelChange = useCallback((model: string) => {
     llm.setSelectedModel(model);
     setSelectedModel(model);
-  }, [llm]);
+  }, [llm, setSelectedModel]);
 
   return (
     <div
diff --git a/packages/openui-cli/src/templates/openui-cloud/src/hooks/use-persisted-model.ts b/packages/openui-cli/src/templates/openui-cloud/src/hooks/use-persisted-model.ts
new file mode 100644
index 000000000..98397fed1
--- /dev/null
+++ b/packages/openui-cli/src/templates/openui-cloud/src/hooks/use-persisted-model.ts
@@ -0,0 +1,35 @@
+"use client";
+
+import { useCallback, useLayoutEffect, useState } from "react";
+
+import { DEFAULT_MODEL, MODEL_OPTIONS } from "@/lib/models";
+
+const STORAGE_KEY = "openui-cloud-selected-model";
+
+export function usePersistedModel(): [string, (model: string) => void] {
+  const [model, setModel] = useState(DEFAULT_MODEL);
+
+  // Restore after mount: reading localStorage during render would make the
+  // server-rendered HTML differ from the client's and break hydration.
+  useLayoutEffect(() => {
+    try {
+      const stored = window.localStorage.getItem(STORAGE_KEY);
+      if (stored && MODEL_OPTIONS.some((option) => option.id === stored)) {
+        setModel(stored);
+      }
+    } catch {
+      // localStorage unavailable; fall back to the default model
+    }
+  }, []);
+
+  const selectModel = useCallback((next: string) => {
+    setModel(next);
+    try {
+      window.localStorage.setItem(STORAGE_KEY, next);
+    } catch {
+      // persistence is best-effort; the in-memory selection still applies
+    }
+  }, []);
+
+  return [model, selectModel];
+}