diff --git a/docs/floating-ai-integration-guide.md b/docs/floating-ai-integration-guide.md
index c7eacd5..e8d2cda 100644
--- a/docs/floating-ai-integration-guide.md
+++ b/docs/floating-ai-integration-guide.md
@@ -8,7 +8,7 @@ This document is designed to be consumed **one step at a time across multiple Cl
 
 ### Workflow Protocol for Each Step
 
-1. **Start a new chat** and say: _"Read `docs/floating-ai-integration-guide.md` and implement Step X"_
+1. **Start a new chat** and say: _"Implement Step [X] from `docs/floating-ai-integration-guide.md`. Use a subagent to extract the general rules and only the data relevant to Step [X], completely ignoring the other steps."_
 2. **Before writing any code**, the agent MUST:
    - Read ALL files listed in the step's "Files to Read First" section
    - Read the project's `CLAUDE.md` for build/lint commands and conventions
@@ -31,7 +31,7 @@ Steps MUST be implemented in order. Each step lists its prerequisites.
 
 | Step | Title | Status |
 |------|-------|--------|
-| 1 | Extract shared `useAIChat` hook | [ ] |
+| 1 | Extract shared `useAIChat` hook | [x] 2026-02-27 |
 | 2 | Create section registry + `FloatingChatContext` | [ ] |
 | 3 | Create double-click hook | [ ] |
 | 4 | Build `FloatingChat` component | [ ] |
@@ -56,7 +56,7 @@ A partial implementation of Step 1 already exists:
 
 ## Step 1: Extract Shared `useAIChat` Hook
 
-**Status**: [ ]
+**Status**: [x] 2026-02-27
 **Prerequisites**: None
 **Creates**: Nothing new (hook file already exists at `src/renderer/hooks/useAIChat.ts`)
 **Modifies**: `src/renderer/components/ai/AIChatPanel.tsx`
diff --git a/src/renderer/components/ai/AIChatPanel.tsx b/src/renderer/components/ai/AIChatPanel.tsx
index c168a03..5059b6a 100644
--- a/src/renderer/components/ai/AIChatPanel.tsx
+++ b/src/renderer/components/ai/AIChatPanel.tsx
@@ -1,21 +1,15 @@
-import { useState, useEffect, useRef, useCallback } from 'react';
+import { useState, useEffect, useRef, useCallback, useMemo } from 'react';
 import { Sparkles, KeyRound, ArrowUp, ListTodo, TrendingUp, AlertCircle, Lightbulb } from 'lucide-react';
 import ReactMarkdown from 'react-markdown';
 import remarkGfm from 'remark-gfm';
 import { trpc } from '@/lib/trpc';
+import { useAIChat, type ChatContext } from '@/hooks/useAIChat';
 import { Card, CardContent } from '@/components/ui/card';
 import { Button } from '@/components/ui/button';
 import { Badge } from '@/components/ui/badge';
 import { Skeleton } from '@/components/ui/skeleton';
 import { ScrollArea } from '@/components/ui/scroll-area';
 
-interface ChatMessage {
-  id: string;
-  role: 'user' | 'assistant';
-  content: string;
-  error?: boolean;
-}
-
 const SUGGESTION_CHIPS = [
   { icon: ListTodo, label: "What's on my plate today?" },
   { icon: TrendingUp, label: 'Summarize this week' },
@@ -46,10 +40,21 @@ export function AIChatPanel({
   const userNameQuery = trpc.settings.getUserName.useQuery(undefined, { enabled: !!isHomePage });
   const dueTodayQuery = trpc.tasks.dueToday.useQuery(undefined, { enabled: !!isHomePage });
 
-  const [messages, setMessages] = useState<ChatMessage[]>([]);
-  const [input, setInput] = useState('');
-  const [isStreaming, setIsStreaming] = useState(false);
-  const [streamingContent, setStreamingContent] = useState('');
+  const chatContext = useMemo<ChatContext>(
+    () => ({
+      type: contextType,
+      ...(contextType === 'project' && projectId ? { projectId } : {}),
+    }),
+    [contextType, projectId],
+  );
+  const {
+    messages,
+    input,
+    setInput,
+    isStreaming,
+    streamingContent,
+    handleSend: chatHandleSend,
+  } = useAIChat(chatContext);
 
   // Daily brief state (home page only)
   const [dailyBrief, setDailyBrief] = useState<string | null>(null);
@@ -59,8 +64,6 @@ export function AIChatPanel({
 
   const messagesContainerRef = useRef<HTMLDivElement | null>(null);
 
-  const streamingContentRef = useRef('');
-  const chatMutation = trpc.ai.chat.useMutation();
   const briefMutation = trpc.ai.dailyBrief.useMutation();
 
   const scrollToBottom = useCallback(() => {
@@ -116,72 +119,9 @@ export function AIChatPanel({
   }, [isHomePage, hasTokenQuery.data]); // briefMutation excluded — only fire once
 
   const handleSend = useCallback(() => {
-    const trimmed = input.trim();
-    if (!trimmed || isStreaming || briefLoading) return;
-
-    const userMsg: ChatMessage = {
-      id: crypto.randomUUID(),
-      role: 'user',
-      content: trimmed,
-    };
-
-    setMessages((prev) => [...prev, userMsg]);
-    setInput('');
-    setIsStreaming(true);
-    setStreamingContent('');
-    streamingContentRef.current = '';
-
-    const unsubscribe = window.electronAI.onStreamChunk(({ token, done }) => {
-      if (done) {
-        const finalContent = streamingContentRef.current;
-        setMessages((prev) => [
-          ...prev,
-          { id: crypto.randomUUID(), role: 'assistant', content: finalContent },
-        ]);
-        setStreamingContent('');
-        streamingContentRef.current = '';
-        setIsStreaming(false);
-        unsubscribe();
-        return;
-      }
-      streamingContentRef.current += token;
-      setStreamingContent(streamingContentRef.current);
-    });
-
-    chatMutation.mutate(
-      {
-        message: trimmed,
-        context: {
-          type: contextType,
-          ...(contextType === 'project' && projectId ? { projectId } : {}),
-        },
-      },
-      {
-        onSuccess: (data) => {
-          if (data.error) {
-            unsubscribe();
-            setMessages((prev) => [
-              ...prev,
-              { id: crypto.randomUUID(), role: 'assistant', content: data.error!, error: true },
-            ]);
-            setStreamingContent('');
-            streamingContentRef.current = '';
-            setIsStreaming(false);
-          }
-        },
-        onError: (err) => {
-          unsubscribe();
-          setMessages((prev) => [
-            ...prev,
-            { id: crypto.randomUUID(), role: 'assistant', content: err.message || 'An unexpected error occurred.', error: true },
-          ]);
-          setStreamingContent('');
-          streamingContentRef.current = '';
-          setIsStreaming(false);
-        },
-      },
-    );
-  }, [input, isStreaming, briefLoading, contextType, projectId, chatMutation]);
+    if (briefLoading) return;
+    chatHandleSend();
+  }, [briefLoading, chatHandleSend]);
 
   const handleKeyDown = (e: React.KeyboardEvent<HTMLTextAreaElement>) => {
     if (e.key === 'Enter' && !e.shiftKey) {