diff --git a/packages/jupyter-ai-magics/jupyter_ai_magics/providers.py b/packages/jupyter-ai-magics/jupyter_ai_magics/providers.py
index 15402dd96..fac868229 100644
--- a/packages/jupyter-ai-magics/jupyter_ai_magics/providers.py
+++ b/packages/jupyter-ai-magics/jupyter_ai_magics/providers.py
@@ -57,10 +57,10 @@
 You may use Markdown to format your response.
 If your response includes code, they must be enclosed in Markdown fenced code blocks (with triple backticks before and after).
 If your response includes mathematical notation, they must be expressed in LaTeX markup and enclosed in LaTeX delimiters.
-- Single dollar signs ($) should never be used as delimiters for inline math.
-- Valid inline math: `\\( \\infty \\)`
-- Valid display math: `\\[ \\infty \\]`
-- Invalid inline math: `$\\infty$`
+All dollar quantities (of USD) must be formatted in LaTeX, with the `$` symbol escaped by a single backslash `\\`.
+- Example prompt: `If I have \\\\$100 and spend \\\\$20, how much money do I have left?`
+- **Correct** response: `You have \\(\\$80\\) remaining.`
+- **Incorrect** response: `You have $80 remaining.`
 If you do not know the answer to a question, answer truthfully by responding that you do not know.
 The following is a friendly conversation between you and a human.
 """.strip()
diff --git a/packages/jupyter-ai/src/components/rendermime-markdown.tsx b/packages/jupyter-ai/src/components/rendermime-markdown.tsx
index 4ecdd8745..9a0278517 100644
--- a/packages/jupyter-ai/src/components/rendermime-markdown.tsx
+++ b/packages/jupyter-ai/src/components/rendermime-markdown.tsx
@@ -39,61 +39,6 @@ function escapeLatexDelimiters(text: string) {
     .replace(/\\\]/g, '\\\\]');
 }
 
-/**
- * Type predicate function that determines whether a given DOM Node is a Text
- * node.
- */
-function isTextNode(node: Node | null): node is Text {
-  return node?.nodeType === Node.TEXT_NODE;
-}
-
-/**
- * Escapes all `$` symbols present in an HTML element except those within the
- * following elements: `pre`, `code`, `samp`, `kbd`.
- *
- * This prevents `$` symbols from being used as inline math delimiters, allowing
- * `$` symbols to be used literally to denote quantities of USD. This does not
- * escape literal `$` within elements that display their contents literally,
- * like code elements. This overrides JupyterLab's default rendering of MarkDown
- * w/ LaTeX.
- *
- * The Jupyter AI system prompt should explicitly request that the LLM not use
- * `$` as an inline math delimiter. This is the default behavior.
- */
-function escapeDollarSymbols(el: HTMLElement) {
-  // Get all text nodes that are not within pre, code, samp, or kbd elements
-  const walker = document.createTreeWalker(el, NodeFilter.SHOW_TEXT, {
-    acceptNode: node => {
-      const isInSkippedElements = node.parentElement?.closest(
-        'pre, code, samp, kbd'
-      );
-      return isInSkippedElements
-        ? NodeFilter.FILTER_SKIP
-        : NodeFilter.FILTER_ACCEPT;
-    }
-  });
-
-  // Collect all valid text nodes in an array.
-  const textNodes: Text[] = [];
-  let currentNode: Node | null;
-  while ((currentNode = walker.nextNode())) {
-    if (isTextNode(currentNode)) {
-      textNodes.push(currentNode);
-    }
-  }
-
-  // Replace each `$` symbol with `\$` for each text node, unless there is
-  // another `$` symbol adjacent or it is already escaped. Examples:
-  // - `$10 - $5` => `\$10 - \$5` (escaped)
-  // - `$$ \infty $$` => `$$ \infty $$` (unchanged)
-  // - `\$10` => `\$10` (unchanged, already escaped)
-  textNodes.forEach(node => {
-    if (node.textContent) {
-      node.textContent = node.textContent.replace(/(?<![$\\])\$(?!\$)/g, '\\$');
-    }
-  });
-}
-
 function RendermimeMarkdownBase(props: RendermimeMarkdownProps): JSX.Element {
   // create a single renderer object at component mount
   const [renderer] = useState(() => {
@@ -131,8 +76,7 @@ function RendermimeMarkdownBase(props: RendermimeMarkdownProps): JSX.Element {
         );
       }
 
-      // step 2: render LaTeX via MathJax, while escaping single dollar symbols.
-      escapeDollarSymbols(renderer.node);
+      // step 2: render LaTeX via MathJax
       props.rmRegistry.latexTypesetter?.typeset(renderer.node);
 
       // insert the rendering into renderingContainer if not yet inserted