diff --git a/packages/client-runtime/src/state/providerInstanceDisplay.test.ts b/packages/client-runtime/src/state/providerInstanceDisplay.test.ts
index 7068a761605a1..27129f11128b3 100644
--- a/packages/client-runtime/src/state/providerInstanceDisplay.test.ts
+++ b/packages/client-runtime/src/state/providerInstanceDisplay.test.ts
@@ -12,6 +12,15 @@ const codex = ProviderDriverKind.make("codex");
 const acpRegistry = ProviderDriverKind.make("acpRegistry");
 
 describe("providerInstanceInitials", () => {
+  it("treats punctuation as a word break but keeps apostrophes between letters", () => {
+    expect(providerInstanceInitials("Codex (hub)")).toBe("CH");
+    expect(providerInstanceInitials("work_codex")).toBe("WC");
+    expect(providerInstanceInitials("Theo's Codex")).toBe("TC");
+    expect(providerInstanceInitials("Codex 'hub'")).toBe("CH");
+    expect(providerInstanceInitials("‘hub’")).toBe("HU");
+    expect(providerInstanceInitials("(hub)")).toBe("HU");
+  });
+
   it("keeps an emoji whole instead of splitting its surrogate pair", () => {
     expect(providerInstanceInitials("😀 Work")).toBe("😀W");
     expect(providerInstanceInitials("😀")).toBe("😀");
diff --git a/packages/client-runtime/src/state/providerInstanceDisplay.ts b/packages/client-runtime/src/state/providerInstanceDisplay.ts
index 64d1d941f1122..62f65445e8217 100644
--- a/packages/client-runtime/src/state/providerInstanceDisplay.ts
+++ b/packages/client-runtime/src/state/providerInstanceDisplay.ts
@@ -27,7 +27,14 @@ export function resolveProviderInstanceDisplayName(
 }
 
 export function providerInstanceInitials(label: string): string {
-  const words = label.replace(/[_-]+/g, " ").split(/\s+/u).filter(Boolean);
+  // Punctuation separates words so "Codex (hub)" reads CH, not C(. An apostrophe
+  // inside a word stays ("Theo's Codex" is TC); a quoting one does not
+  // ("Codex 'hub'" is CH).
+  const words = label
+    .replace(/[^\P{P}'’]+/gu, " ")
+    .split(/\s+/u)
+    .map((word) => word.replace(/^['’]+|['’]+$/gu, ""))
+    .filter(Boolean);
   if (words.length === 0) return "";
   if (words.length === 1) return Array.from(words[0]!).slice(0, 2).join("").toUpperCase();
   return words