diff --git a/__pycache__/ai_service.cpython-312.pyc b/__pycache__/ai_service.cpython-312.pyc
index b93d229..bf7ea1f 100644
Binary files a/__pycache__/ai_service.cpython-312.pyc and b/__pycache__/ai_service.cpython-312.pyc differ
diff --git a/ai_service.py b/ai_service.py
index ec1b03e..ce4b057 100644
--- a/ai_service.py
+++ b/ai_service.py
@@ -37,12 +37,30 @@ def llm_chat(messages, temperature=0.3, max_tokens=4000, response_format=None):
 
 
 def extract_json(text):
-    """Extract JSON from LLM response, handling markdown code blocks."""
+    """Extract JSON from LLM response, handling markdown code blocks and truncation."""
     json_str = text.strip()
     if json_str.startswith("```"):
         json_str = re.sub(r'^```(?:json)?\s*', '', json_str)
         json_str = re.sub(r'\s*```$', '', json_str)
-    return json.loads(json_str)
+    
+    try:
+        return json.loads(json_str)
+    except json.JSONDecodeError:
+        # Try to fix truncated JSON by closing open braces/brackets
+        open_b = json_str.count('{')
+        close_b = json_str.count('}')
+        open_arr = json_str.count('[')
+        close_arr = json_str.count(']')
+        if open_b > close_b or open_arr > close_arr:
+            # Remove any trailing partial content after last complete element
+            # then close the structures
+            json_str = json_str.rstrip()
+            # Remove trailing incomplete key-value (e.g. cut off mid-string)
+            json_str = re.sub(r'[\s,]*"[^"]*":\s*"?[^",}\]]*$', '', json_str)
+            json_str += '}' * max(0, open_b - json_str.count('}'))
+            json_str += ']' * max(0, open_arr - json_str.count(']'))
+            return json.loads(json_str)
+        raise
 
 
 # ============================================================
@@ -333,8 +351,34 @@ def generate_template(description: str) -> dict:
         {"role": "system", "content": "You are a CV template designer that outputs only valid JSON."},
         {"role": "user", "content": prompt}
     ]
-    resp = llm_chat(messages, temperature=0.5, max_tokens=2000)
-    return extract_json(resp)
+    
+    # Retry with increasing max_tokens if JSON parsing fails
+    for attempt, max_tok in enumerate([2000, 3000, 4000]):
+        try:
+            resp = llm_chat(messages, temperature=0.5, max_tokens=max_tok)
+            return extract_json(resp)
+        except json.JSONDecodeError as e:
+            if attempt < 2:
+                # Retry with more tokens
+                continue
+            # Last attempt failed — try to salvage partial JSON
+            try:
+                # Attempt to fix truncated JSON by closing braces
+                json_str = resp.strip()
+                if json_str.startswith("```"):
+                    json_str = re.sub(r'^```(?:json)?\s*', '', json_str)
+                    json_str = re.sub(r'\s*```$', '', json_str)
+                # Count open vs close braces
+                open_b = json_str.count('{')
+                close_b = json_str.count('}')
+                open_arr = json_str.count('[')
+                close_arr = json_str.count(']')
+                # Append missing closers
+                json_str += '}' * (open_b - close_b)
+                json_str += ']' * (open_arr - close_arr)
+                return json.loads(json_str)
+            except:
+                raise ValueError(f"AI returned invalid JSON (truncated at {max_tok} tokens). Please try again with a shorter description.")
 
 
 # ============================================================
diff --git a/static/app.js b/static/app.js
index 074989a..ba3f3b5 100644
--- a/static/app.js
+++ b/static/app.js
@@ -286,18 +286,37 @@ async function createTemplate() {
 async function generateTemplate() {
   const desc = document.getElementById('tmpl-gen-desc').value;
   if (!desc) { toast('Description required', 'error'); return; }
-  document.querySelector('.modal button').textContent = 'Generating...';
-  document.querySelector('.modal button').disabled = true;
+  const btn = document.querySelector('.modal button');
+  btn.textContent = 'Generating...';
+  btn.disabled = true;
   try {
-    await api('/api/templates/generate', 'POST', {
-      name: document.getElementById('tmpl-gen-name').value || 'AI Generated Template',
-      description: desc
+    const controller = new AbortController();
+    const timeout = setTimeout(() => controller.abort(), 120000); // 2 min timeout
+    const resp = await fetch(API + '/api/templates/generate', {
+      method: 'POST',
+      headers: { 'Content-Type': 'application/json' },
+      body: JSON.stringify({
+        name: document.getElementById('tmpl-gen-name').value || 'AI Generated Template',
+        description: desc
+      }),
+      signal: controller.signal
     });
+    clearTimeout(timeout);
+    if (!resp.ok) {
+      const err = await resp.text();
+      throw new Error(err);
+    }
     closeModal();
     toast('Template generated with AI');
     loadTemplates();
   } catch(e) {
-    toast('Generation failed: ' + e.message, 'error');
+    btn.textContent = 'Generate with AI';
+    btn.disabled = false;
+    if (e.name === 'AbortError') {
+      toast('Generation timed out after 2 minutes. Try a shorter description.', 'error');
+    } else {
+      toast('Generation failed: ' + e.message, 'error');
+    }
   }
 }