diff --git a/frontend/src/pages/pipelines/global/modelCustomization/startRunModal/__tests__/useContinueState.spec.tsx b/frontend/src/pages/pipelines/global/modelCustomization/startRunModal/__tests__/useContinueState.spec.tsx
new file mode 100644
index 0000000000..88d4fcf3cc
--- /dev/null
+++ b/frontend/src/pages/pipelines/global/modelCustomization/startRunModal/__tests__/useContinueState.spec.tsx
@@ -0,0 +1,103 @@
+import { testHook } from '~/__tests__/unit/testUtils/hooks';
+import { useIlabPipeline } from '~/concepts/pipelines/content/modelCustomizationForm/useIlabPipeline';
+import { usePipelinesAPI } from '~/concepts/pipelines/context';
+import { useContinueState } from '~/pages/pipelines/global/modelCustomization/startRunModal/useContinueState';
+
+jest.mock('~/concepts/pipelines/context');
+jest.mock('~/concepts/pipelines/content/modelCustomizationForm/useIlabPipeline');
+
+describe('useContinueState', () => {
+  const mockUsePipelinesAPI = usePipelinesAPI as jest.Mock;
+  const mockUseIlabPipeline = useIlabPipeline as jest.Mock;
+
+  beforeEach(() => {
+    jest.clearAllMocks();
+  });
+
+  it('is loading and cannot continue because the pipeline server is initializing', () => {
+    mockUsePipelinesAPI.mockReturnValue({ pipelinesServer: { initializing: true } });
+    mockUseIlabPipeline.mockReturnValue([null, false, null]);
+
+    const renderResult = testHook(useContinueState)();
+    expect(renderResult.result.current).toEqual({ canContinue: false, isLoading: true });
+  });
+
+  it('is loading and cannot continue because the ilab pipeline is not loaded', () => {
+    mockUsePipelinesAPI.mockReturnValue({ pipelinesServer: { initializing: false } });
+    mockUseIlabPipeline.mockReturnValue([null, false, null]);
+
+    const renderResult = testHook(useContinueState)();
+    expect(renderResult.result.current).toEqual({ canContinue: false, isLoading: true });
+  });
+
+  it('cannot continue because the pipeline server is not accessible', () => {
+    mockUsePipelinesAPI.mockReturnValue({
+      pipelinesServer: {
+        initializing: false,
+        installed: false,
+        compatible: false,
+        timedOut: false,
+      },
+    });
+    mockUseIlabPipeline.mockReturnValue([null, true, null]);
+
+    const renderResult = testHook(useContinueState)();
+    expect(renderResult.result.current).toEqual({
+      canContinue: false,
+      isLoading: false,
+      unmetCondition: 'pipelineServerAccessible',
+    });
+  });
+
+  it('cannot continue because the pipeline server is not online', () => {
+    mockUsePipelinesAPI.mockReturnValue({
+      pipelinesServer: { initializing: false, installed: true, compatible: true, timedOut: true },
+    });
+    mockUseIlabPipeline.mockReturnValue([null, true, null]);
+
+    const renderResult = testHook(useContinueState)();
+    expect(renderResult.result.current).toEqual({
+      canContinue: false,
+      isLoading: false,
+      unmetCondition: 'pipelineServerOnline',
+    });
+  });
+
+  it('cannot continue because the pipeline server is not configured properly', () => {
+    mockUsePipelinesAPI.mockReturnValue({
+      pipelinesServer: { initializing: false, installed: true, compatible: false, timedOut: false },
+    });
+    mockUseIlabPipeline.mockReturnValue([null, false, new Error('Load error')]);
+
+    const renderResult = testHook(useContinueState)();
+    expect(renderResult.result.current).toEqual({
+      canContinue: false,
+      isLoading: false,
+      unmetCondition: 'pipelineServerConfigured',
+    });
+  });
+
+  it('cannot continue because the ilab pipeline is not installed properly', () => {
+    mockUsePipelinesAPI.mockReturnValue({
+      pipelinesServer: { initializing: false, installed: true, compatible: true, timedOut: false },
+    });
+    mockUseIlabPipeline.mockReturnValue([null, true, null]);
+
+    const renderResult = testHook(useContinueState)();
+    expect(renderResult.result.current).toEqual({
+      canContinue: false,
+      isLoading: false,
+      unmetCondition: 'ilabPipelineInstalled',
+    });
+  });
+
+  it('can continue because all conditions are met', () => {
+    mockUsePipelinesAPI.mockReturnValue({
+      pipelinesServer: { initializing: false, installed: true, compatible: true, timedOut: false },
+    });
+    mockUseIlabPipeline.mockReturnValue([{}, true, null]);
+
+    const renderResult = testHook(useContinueState)();
+    expect(renderResult.result.current).toEqual({ canContinue: true, isLoading: false });
+  });
+});