diff --git a/src/cmd/cli/command/compose.go b/src/cmd/cli/command/compose.go
index 51d6b2126..c7cc0caed 100644
--- a/src/cmd/cli/command/compose.go
+++ b/src/cmd/cli/command/compose.go
@@ -23,7 +23,6 @@ import (
 	"github.com/DefangLabs/defang/src/pkg/stacks"
 	"github.com/DefangLabs/defang/src/pkg/term"
 	"github.com/DefangLabs/defang/src/pkg/timeutils"
-	"github.com/DefangLabs/defang/src/pkg/track"
 	"github.com/DefangLabs/defang/src/pkg/types"
 	defangv1 "github.com/DefangLabs/defang/src/protos/io/defang/v1"
 	"github.com/bufbuild/connect-go"
@@ -83,23 +82,7 @@ func makeComposeUpCmd() *cobra.Command {
 
 			project, loadErr := session.Loader.LoadProject(ctx)
 			if loadErr != nil {
-				if global.NonInteractive {
-					return loadErr
-				}
-
-				term.Error("Cannot load project:", loadErr)
-				project, err := session.Loader.CreateProjectForDebug()
-				if err != nil {
-					return err
-				}
-
-				debugger, err := debug.NewDebugger(ctx, global.Cluster, session.Stack)
-				if err != nil {
-					return err
-				}
-				return debugger.DebugComposeLoadError(ctx, debug.DebugConfig{
-					Project: project,
-				}, loadErr)
+				return handleInvalidComposeFileErr(ctx, loadErr)
 			}
 
 			// Check if the user has permission to use the provider
@@ -550,26 +533,7 @@ func makeComposeConfigCmd() *cobra.Command {
 
 			project, loadErr := sessionx.Loader.LoadProject(ctx)
 			if loadErr != nil {
-				if global.NonInteractive {
-					return loadErr
-				}
-
-				term.Error("Cannot load project:", loadErr)
-				project, err := sessionx.Loader.CreateProjectForDebug()
-				if err != nil {
-					term.Warn("Failed to create project for debug:", err)
-					return loadErr
-				}
-
-				track.Evt("Debug Prompted", P("loadErr", loadErr))
-				debugger, err := debug.NewDebugger(ctx, global.Cluster, &global.Stack)
-				if err != nil {
-					term.Warn("Failed to initialize debugger:", err)
-					return loadErr
-				}
-				return debugger.DebugComposeLoadError(ctx, debug.DebugConfig{
-					Project: project,
-				}, loadErr)
+				return handleInvalidComposeFileErr(ctx, loadErr)
 			}
 
 			_, _, err = cli.ComposeUp(ctx, global.Client, sessionx.Provider, sessionx.Stack, cli.ComposeUpParams{
diff --git a/src/cmd/cli/command/session.go b/src/cmd/cli/command/session.go
index 4a724940b..569032b62 100644
--- a/src/cmd/cli/command/session.go
+++ b/src/cmd/cli/command/session.go
@@ -11,10 +11,12 @@ import (
 	"github.com/AlecAivazis/survey/v2"
 	"github.com/DefangLabs/defang/src/pkg/cli/client"
 	"github.com/DefangLabs/defang/src/pkg/cli/compose"
+	"github.com/DefangLabs/defang/src/pkg/debug"
 	"github.com/DefangLabs/defang/src/pkg/session"
 	"github.com/DefangLabs/defang/src/pkg/stacks"
 	"github.com/DefangLabs/defang/src/pkg/term"
 	"github.com/DefangLabs/defang/src/pkg/track"
+	"github.com/DefangLabs/defang/src/pkg/types"
 	"github.com/spf13/cobra"
 )
 
@@ -102,6 +104,9 @@ func newStackManagerForLoader(ctx context.Context, loader *compose.Loader) (sess
 	}
 	projectName, _, err := loader.LoadProjectName(ctx)
 	if err != nil {
+		if !errors.Is(err, types.ErrComposeFileNotFound) {
+			return nil, handleInvalidComposeFileErr(ctx, err)
+		}
 		term.Debugf("Could not determine project name: %v", err)
 	}
 	sm, err := stacks.NewManager(global.Client, targetDirectory, projectName, ec)
@@ -133,3 +138,31 @@ func findTargetDirectory() (string, error) {
 		wd = parent
 	}
 }
+
+func handleInvalidComposeFileErr(ctx context.Context, err error) error {
+	if global.NonInteractive {
+		return err
+	}
+
+	if !strings.HasPrefix(err.Error(), "yaml: ") && !strings.HasPrefix(err.Error(), "validating ") {
+		return err
+	}
+
+	term.Error("Cannot load project:", err)
+	project, err := compose.NewLoader().CreateProjectForDebug()
+	if err != nil {
+		return err
+	}
+
+	debugger, err := debug.NewDebugger(ctx, global.Cluster, &stacks.Parameters{})
+	if err != nil {
+		return err
+	}
+	debugErr := debugger.DebugComposeLoadError(ctx, debug.DebugConfig{
+		Project: project,
+	}, err)
+	if debugErr != nil {
+		return fmt.Errorf("failed to debug compose load error: %w; original error: %v", debugErr, err)
+	}
+	return err
+}
diff --git a/src/pkg/cli/compose/loader.go b/src/pkg/cli/compose/loader.go
index a54c0c4de..3044da40d 100644
--- a/src/pkg/cli/compose/loader.go
+++ b/src/pkg/cli/compose/loader.go
@@ -115,7 +115,6 @@ func (l *Loader) loadProject(ctx context.Context, suppressWarn bool) (*Project,
 		if errors.Is(err, errdefs.ErrNotFound) {
 			return nil, types.ErrComposeFileNotFound
 		}
-
 		return nil, err
 	}
 
diff --git a/src/pkg/debug/debug.go b/src/pkg/debug/debug.go
index 2c4549660..dac7ffa60 100644
--- a/src/pkg/debug/debug.go
+++ b/src/pkg/debug/debug.go
@@ -141,7 +141,7 @@ func (d *Debugger) promptAndTrackDebugSession(fn func() error, eventName string,
 func (d *Debugger) promptForPermission() (bool, error) {
 	var aiDebug bool
 	err := d.surveyor.AskOne(&survey.Confirm{
-		Message: "Would you like to debug the deployment with AI?",
+		Message: "Would you like to debug this with the Defang AI Agent?",
 		Help:    "This will send logs and artifacts to our backend and attempt to diagnose the issue and provide a solution.",
 	}, &aiDebug, survey.WithStdio(term.DefaultTerm.Stdio()))
 	if err != nil {