diff --git a/internal/ai/service.go b/internal/ai/service.go
index ce7f25b4a..ea79a7579 100644
--- a/internal/ai/service.go
+++ b/internal/ai/service.go
@@ -931,6 +931,10 @@ func (s *Service) LoadConfig() error {
 
 // IsEnabled returns true if AI is enabled and configured
 func (s *Service) IsEnabled() bool {
+	// In demo mode, AI is always considered enabled (using mock backend)
+	if IsDemoMode() {
+		return true
+	}
 	s.mu.RLock()
 	defer s.mu.RUnlock()
 	return s.cfg != nil && s.cfg.Enabled && s.provider != nil
diff --git a/internal/api/ai_handlers.go b/internal/api/ai_handlers.go
index 84cd5a4ca..db7c7ef4e 100644
--- a/internal/api/ai_handlers.go
+++ b/internal/api/ai_handlers.go
@@ -244,8 +244,11 @@ func (h *AISettingsHandler) HandleGetAISettings(w http.ResponseWriter, r *http.R
 		authMethod = string(config.AuthMethodAPIKey)
 	}
 
+	// Determine if running in demo mode
+	isDemo := strings.EqualFold(os.Getenv("PULSE_MOCK_MODE"), "true")
+
 	response := AISettingsResponse{
-		Enabled:        settings.Enabled,
+		Enabled:        settings.Enabled || isDemo,
 		Provider:       settings.Provider,
 		APIKeySet:      settings.APIKey != "",
 		Model:          settings.GetModel(),
@@ -253,7 +256,7 @@ func (h *AISettingsHandler) HandleGetAISettings(w http.ResponseWriter, r *http.R
 		PatrolModel:    settings.PatrolModel,
 		AutoFixModel:   settings.AutoFixModel,
 		BaseURL:        settings.BaseURL,
-		Configured:     settings.IsConfigured(),
+		Configured:     settings.IsConfigured() || isDemo,
 		AutonomousMode: settings.AutonomousMode,
 		CustomContext:  settings.CustomContext,
 		AuthMethod:     authMethod,