diff --git a/packages/editor/src/core/extensions/custom-image/components/image-block.tsx b/packages/editor/src/core/extensions/custom-image/components/image-block.tsx
index 89ace94a57f..f6843210a83 100644
--- a/packages/editor/src/core/extensions/custom-image/components/image-block.tsx
+++ b/packages/editor/src/core/extensions/custom-image/components/image-block.tsx
@@ -145,7 +145,7 @@ export const CustomImageBlock: React.FC<CustomImageNodeViewProps> = (props) => {
         src={src}
         width={size.width}
         height={size.height}
-        className={cn("block rounded-md", {
+        className={cn("image-component block rounded-md", {
           hidden: isShimmerVisible,
           "read-only-image": !editor.isEditable,
         })}
diff --git a/packages/editor/src/core/extensions/side-menu.tsx b/packages/editor/src/core/extensions/side-menu.tsx
index 038d679b185..616e315e206 100644
--- a/packages/editor/src/core/extensions/side-menu.tsx
+++ b/packages/editor/src/core/extensions/side-menu.tsx
@@ -78,10 +78,11 @@ const SideMenu = (options: SideMenuPluginProps) => {
       hideSideMenu();
       view?.dom.parentElement?.appendChild(editorSideMenu);
       // side menu elements' initialization
-      if (handlesConfig.ai) {
+      if (handlesConfig.ai && !editorSideMenu.querySelector("#ai-handle")) {
         aiHandleView(view, editorSideMenu);
       }
-      if (handlesConfig.dragDrop) {
+
+      if (handlesConfig.dragDrop && !editorSideMenu.querySelector("#drag-handle")) {
         dragHandleView(view, editorSideMenu);
       }
 
@@ -113,6 +114,10 @@ const SideMenu = (options: SideMenuPluginProps) => {
           rect.top += (lineHeight - 20) / 2;
           rect.top += paddingTop;
 
+          if (handlesConfig.ai) {
+            rect.left -= 20;
+          }
+
           if (node.parentElement?.parentElement?.matches("td") || node.parentElement?.parentElement?.matches("th")) {
             if (node.matches("ul:not([data-type=taskList]) li, ol li")) {
               rect.left -= 5;
diff --git a/packages/editor/src/core/plugins/ai-handle.ts b/packages/editor/src/core/plugins/ai-handle.ts
index 8af93ed1dd1..5f87df3ffed 100644
--- a/packages/editor/src/core/plugins/ai-handle.ts
+++ b/packages/editor/src/core/plugins/ai-handle.ts
@@ -2,45 +2,12 @@ import { NodeSelection } from "@tiptap/pm/state";
 import { EditorView } from "@tiptap/pm/view";
 // extensions
 import { SideMenuHandleOptions, SideMenuPluginProps } from "@/extensions";
+// plugins
+import { nodeDOMAtCoords } from "@/plugins/drag-handle";
 
 const sparklesIcon =
   '<svg xmlns="http://www.w3.org/2000/svg" width="14" height="14" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-sparkles"><path d="M9.937 15.5A2 2 0 0 0 8.5 14.063l-6.135-1.582a.5.5 0 0 1 0-.962L8.5 9.936A2 2 0 0 0 9.937 8.5l1.582-6.135a.5.5 0 0 1 .963 0L14.063 8.5A2 2 0 0 0 15.5 9.937l6.135 1.581a.5.5 0 0 1 0 .964L15.5 14.063a2 2 0 0 0-1.437 1.437l-1.582 6.135a.5.5 0 0 1-.963 0z"/><path d="M20 3v4"/><path d="M22 5h-4"/><path d="M4 17v2"/><path d="M5 18H3"/></svg>';
 
-const nodeDOMAtCoords = (coords: { x: number; y: number }) => {
-  const elements = document.elementsFromPoint(coords.x, coords.y);
-  const generalSelectors = [
-    "li",
-    "p:not(:first-child)",
-    ".code-block",
-    "blockquote",
-    "img",
-    "h1, h2, h3, h4, h5, h6",
-    "[data-type=horizontalRule]",
-    ".table-wrapper",
-    ".issue-embed",
-  ].join(", ");
-
-  for (const elem of elements) {
-    if (elem.matches("p:first-child") && elem.parentElement?.matches(".ProseMirror")) {
-      return elem;
-    }
-
-    // if the element is a <p> tag that is the first child of a td or th
-    if (
-      (elem.matches("td > p:first-child") || elem.matches("th > p:first-child")) &&
-      elem?.textContent?.trim() !== ""
-    ) {
-      return elem; // Return only if p tag is not empty in td or th
-    }
-
-    // apply general selector
-    if (elem.matches(generalSelectors)) {
-      return elem;
-    }
-  }
-  return null;
-};
-
 const nodePosAtDOM = (node: Element, view: EditorView, options: SideMenuPluginProps) => {
   const boundingRect = node.getBoundingClientRect();
 
diff --git a/packages/editor/src/core/plugins/drag-handle.ts b/packages/editor/src/core/plugins/drag-handle.ts
index d260b284968..ba390180bbe 100644
--- a/packages/editor/src/core/plugins/drag-handle.ts
+++ b/packages/editor/src/core/plugins/drag-handle.ts
@@ -37,39 +37,19 @@ export const nodeDOMAtCoords = (coords: { x: number; y: number }) => {
     "p:not(:first-child)",
     ".code-block",
     "blockquote",
-    "img",
     "h1, h2, h3, h4, h5, h6",
     "[data-type=horizontalRule]",
     ".table-wrapper",
     ".issue-embed",
+    ".image-component",
     ".image-upload-component",
   ].join(", ");
 
-  const hasNestedImg = (el: Element): boolean => {
-    if (el.tagName.toLowerCase() === "img") return true;
-    // @ts-expect-error todo
-    for (const child of el.children) {
-      if (hasNestedImg(child)) return true;
-    }
-    return false;
-  };
-
   for (const elem of elements) {
-    const elemHasNestedImg = hasNestedImg(elem);
     if (elem.matches("p:first-child") && elem.parentElement?.matches(".ProseMirror")) {
       return elem;
     }
 
-    // if the element is a <p> tag and has a nested img i.e. the new image
-    // component
-    if (elem.matches("p") && elemHasNestedImg) {
-      return null;
-    }
-
-    if (elem.matches("div") && elemHasNestedImg) {
-      return elem;
-    }
-
     // if the element is a <p> tag that is the first child of a td or th
     if (
       (elem.matches("td > p:first-child") || elem.matches("th > p:first-child")) &&
diff --git a/packages/editor/src/styles/drag-drop.css b/packages/editor/src/styles/drag-drop.css
index 96b40d450b8..7db6ed87554 100644
--- a/packages/editor/src/styles/drag-drop.css
+++ b/packages/editor/src/styles/drag-drop.css
@@ -5,7 +5,6 @@
   align-items: center;
   opacity: 1;
   transition: opacity 0.2s ease 0.2s;
-  transform: translateX(-50%);
 
   &.side-menu-hidden {
     opacity: 0;