diff --git a/packages/ai/src/provider-error.ts b/packages/ai/src/provider-error.ts
index 35b9cff7425..cfe108afa1d 100644
--- a/packages/ai/src/provider-error.ts
+++ b/packages/ai/src/provider-error.ts
@@ -147,6 +147,8 @@ const CONTENT_POLICY_CODES = new Set([
 // OpenCode Zen replaces upstream codes outside its allow-list but keeps the original
 // as a `[code]` label at the start of the rewritten message.
 const GATEWAY_CODE_LABEL = /^[^:\n]+: \[([A-Za-z0-9_.-]+)\]/
+// xAI reports an invalid API key as HTTP 400 with the generic `invalid-argument` code.
+const AUTH_TEXT = /incorrect api key provided/i
 const RATE_LIMIT_TEXT = /rate increased too quickly|rate[-_\s]?limit|too[_\s]?many[_\s]?requests/i
 // Only consulted on 429, where throttles and account caps share a status.
 const QUOTA_TEXT = /insufficient[-_\s]?quota|quota[-_\s]?exceeded|budget exceeded|usage limit/i
@@ -246,7 +248,12 @@ export function classifyProviderFailure(input: ProviderFailure): AIError["reason
     (input.status === 429 && QUOTA_TEXT.test(text))
   )
     return new QuotaExceededError(details)
-  if (input.status === 401 || input.status === 403 || codes.some((code) => AUTH_CODES.has(code)))
+  if (
+    input.status === 401 ||
+    input.status === 403 ||
+    codes.some((code) => AUTH_CODES.has(code)) ||
+    (input.status === 400 && AUTH_TEXT.test(text))
+  )
     return new AuthenticationError(details)
   if (
     input.status === 429 ||
diff --git a/packages/ai/test/provider-error.test.ts b/packages/ai/test/provider-error.test.ts
index 98a94c1b143..c342ea60a55 100644
--- a/packages/ai/test/provider-error.test.ts
+++ b/packages/ai/test/provider-error.test.ts
@@ -383,7 +383,7 @@ describe("provider error rawBody classification", () => {
     expect(reason._tag === "InvalidRequest" ? reason.classification : reason._tag).toBe("context-overflow")
   })
 
-  test("classifies Google invalid API keys as authentication failures", () => {
+  test("classifies invalid API keys reported as HTTP 400 as authentication failures", () => {
     const rawBody = JSON.stringify({
       error: {
         code: 400,
@@ -407,6 +407,14 @@ describe("provider error rawBody classification", () => {
       classifyProviderFailure({ message: "API key not valid. Please pass a valid API key.", status: 400, rawBody })
         ._tag,
     ).toBe("Authentication")
+    // xAI
+    expect(
+      classifyProviderFailure({
+        message: "Incorrect API key provided. You can obtain an API key from https://console.x.ai.",
+        status: 400,
+        rawBody: '{"code":"invalid-argument","error":"Incorrect API key provided."}',
+      })._tag,
+    ).toBe("Authentication")
   })
 
   test("classifies overflow signals buried in the raw payload when the summary is vague", () => {