diff --git a/src/agents/pi-embedded-helpers.isbillingerrormessage.test.ts b/src/agents/pi-embedded-helpers.isbillingerrormessage.test.ts
index 09262aa6769..13f3ea1d388 100644
--- a/src/agents/pi-embedded-helpers.isbillingerrormessage.test.ts
+++ b/src/agents/pi-embedded-helpers.isbillingerrormessage.test.ts
@@ -853,12 +853,42 @@ describe("classifyFailoverReason", () => {
     expect(classifyFailoverReason("key has been disabled")).toBe("auth_permanent");
     expect(classifyFailoverReason("account has been deactivated")).toBe("auth_permanent");
   });
-  it("classifies JSON api_error internal server failures as timeout", () => {
+  it("classifies JSON api_error with transient signal as timeout", () => {
     expect(
       classifyFailoverReason(
         '{"type":"error","error":{"type":"api_error","message":"Internal server error"}}',
       ),
     ).toBe("timeout");
+    // MiniMax non-standard message
+    expect(
+      classifyFailoverReason('{"type":"api_error","message":"unknown error, 520 (1000)"}'),
+    ).toBe("timeout");
+    // Overloaded variant
+    expect(
+      classifyFailoverReason(
+        '{"type":"error","error":{"type":"api_error","message":"Service temporarily unavailable"}}',
+      ),
+    ).toBe("timeout");
+  });
+  it("does not classify non-transient api_error payloads as timeout", () => {
+    // Context overflow - not transient
+    expect(
+      classifyFailoverReason(
+        '{"type":"error","error":{"type":"api_error","message":"Request size exceeds model context window"}}',
+      ),
+    ).not.toBe("timeout");
+    // Schema/validation error - not transient
+    expect(
+      classifyFailoverReason(
+        '{"type":"error","error":{"type":"api_error","message":"messages.1.content.1.tool_use.id should match pattern"}}',
+      ),
+    ).not.toBe("timeout");
+    // Generic unknown api_error without transient wording - should not be retried
+    expect(
+      classifyFailoverReason(
+        '{"type":"error","error":{"type":"api_error","message":"invalid input format"}}',
+      ),
+    ).not.toBe("timeout");
   });
   it("does not shadow billing errors that carry api_error type", () => {
     // A provider may wrap a billing error in a JSON payload with "type":"api_error".
diff --git a/src/agents/pi-embedded-helpers/errors.ts b/src/agents/pi-embedded-helpers/errors.ts
index 10725427566..e978f8ea512 100644
--- a/src/agents/pi-embedded-helpers/errors.ts
+++ b/src/agents/pi-embedded-helpers/errors.ts
@@ -848,6 +848,13 @@ export function isBillingAssistantError(msg: AssistantMessage | undefined): bool
   return isBillingErrorMessage(msg.errorMessage ?? "");
 }
 
+// Transient signal patterns for api_error payloads. Only treat an api_error as
+// retryable when the message text itself indicates a transient server issue.
+// Non-transient api_error payloads (context overflow, validation/schema errors)
+// must NOT be classified as timeout.
+const API_ERROR_TRANSIENT_SIGNALS_RE =
+  /internal server error|overload|temporarily unavailable|service unavailable|unknown error|server error|bad gateway|gateway timeout|upstream error|backend error|try again later|temporarily.+unable/i;
+
 function isJsonApiInternalServerError(raw: string): boolean {
   if (!raw) {
     return false;
@@ -865,7 +872,10 @@ function isJsonApiInternalServerError(raw: string): boolean {
   if (isBillingErrorMessage(raw) || isAuthErrorMessage(raw) || isAuthPermanentErrorMessage(raw)) {
     return false;
   }
-  return true;
+  // Only match when the message contains a transient signal. api_error payloads
+  // with non-transient messages (e.g. context overflow, schema validation) should
+  // fall through to more specific classifiers or remain unclassified.
+  return API_ERROR_TRANSIENT_SIGNALS_RE.test(raw);
 }
 
 export function parseImageDimensionError(raw: string): {