diff --git a/extension/src/setup/autoInstall.ts b/extension/src/setup/autoInstall.ts
index 49b4b43421..b38480e43a 100644
--- a/extension/src/setup/autoInstall.ts
+++ b/extension/src/setup/autoInstall.ts
@@ -23,25 +23,33 @@ const showInstallProgress = (
   Toast.showProgress('Installing packages', async progress => {
     progress.report({ increment: 0 })
 
-    await Toast.runCommandAndIncrementProgress(
-      async () => {
-        await installPackages(root, pythonBinPath, 'dvclive')
-        return 'DVCLive Installed'
-      },
-      progress,
-      25
-    )
+    try {
+      await Toast.runCommandAndIncrementProgress(
+        async () => {
+          await installPackages(root, pythonBinPath, 'dvclive')
+          return 'DVCLive Installed'
+        },
+        progress,
+        25
+      )
+    } catch (error: unknown) {
+      return Toast.reportProgressError(error, progress)
+    }
 
-    await Toast.runCommandAndIncrementProgress(
-      async () => {
-        await installPackages(root, pythonBinPath, 'dvc')
-        return 'DVC Installed'
-      },
-      progress,
-      75
-    )
+    try {
+      await Toast.runCommandAndIncrementProgress(
+        async () => {
+          await installPackages(root, pythonBinPath, 'dvc')
+          return 'DVC Installed'
+        },
+        progress,
+        75
+      )
 
-    return Toast.delayProgressClosing()
+      return Toast.delayProgressClosing()
+    } catch (error: unknown) {
+      return Toast.reportProgressError(error, progress)
+    }
   })
 
 export const autoInstallDvc = async (): Promise<unknown> => {
diff --git a/extension/src/test/suite/setup/autoInstall.test.ts b/extension/src/test/suite/setup/autoInstall.test.ts
index 44276f5dfd..775a75fb32 100644
--- a/extension/src/test/suite/setup/autoInstall.test.ts
+++ b/extension/src/test/suite/setup/autoInstall.test.ts
@@ -8,6 +8,7 @@ import * as Python from '../../../python'
 import { autoInstallDvc } from '../../../setup/autoInstall'
 import * as WorkspaceFolders from '../../../vscode/workspaceFolders'
 import { bypassProgressCloseDelay } from '../util'
+import { Toast } from '../../../vscode/toast'
 
 const { getDefaultPython } = Python
 
@@ -89,5 +90,64 @@ suite('Auto Install Test Suite', () => {
         'dvclive'
       )
     })
+
+    it('should show an error message and exit early if DVCLive fails to install', async () => {
+      bypassProgressCloseDelay()
+      const cwd = __dirname
+      stub(PythonExtension, 'getPythonExecutionDetails').resolves(undefined)
+      stub(Python, 'findPythonBin').resolves(defaultPython)
+      const mockInstallPackages = stub(Python, 'installPackages').rejects(
+        new Error('Failed to install DVCLive')
+      )
+      stub(WorkspaceFolders, 'getFirstWorkspaceFolder').returns(cwd)
+
+      const showProgressSpy = spy(window, 'withProgress')
+      const showErrorSpy = spy(window, 'showErrorMessage')
+
+      await autoInstallDvc()
+
+      expect(showProgressSpy).to.be.called
+      expect(showErrorSpy).not.to.be.called
+      expect(mockInstallPackages).to.be.calledOnce
+      expect(mockInstallPackages).to.be.calledWithExactly(
+        cwd,
+        defaultPython,
+        'dvclive'
+      )
+    })
+
+    it('should show an error message if DVC fails to install', async () => {
+      bypassProgressCloseDelay()
+      const cwd = __dirname
+      stub(PythonExtension, 'getPythonExecutionDetails').resolves(undefined)
+      stub(Python, 'findPythonBin').resolves(defaultPython)
+      const mockInstallPackages = stub(Python, 'installPackages')
+        .onFirstCall()
+        .resolves(undefined)
+        .onSecondCall()
+        .rejects(new Error('Network error'))
+      stub(WorkspaceFolders, 'getFirstWorkspaceFolder').returns(cwd)
+
+      const showProgressSpy = spy(window, 'withProgress')
+      const showErrorSpy = spy(window, 'showErrorMessage')
+      const reportProgressErrorSpy = spy(Toast, 'reportProgressError')
+
+      await autoInstallDvc()
+
+      expect(showProgressSpy).to.be.called
+      expect(showErrorSpy).not.to.be.called
+      expect(reportProgressErrorSpy).to.be.calledOnce
+      expect(mockInstallPackages).to.be.calledTwice
+      expect(mockInstallPackages).to.be.calledWithExactly(
+        cwd,
+        defaultPython,
+        'dvclive'
+      )
+      expect(mockInstallPackages).to.be.calledWithExactly(
+        cwd,
+        defaultPython,
+        'dvc'
+      )
+    })
   })
 })
diff --git a/extension/src/vscode/toast.ts b/extension/src/vscode/toast.ts
index d8006950a2..cd4c81579e 100644
--- a/extension/src/vscode/toast.ts
+++ b/extension/src/vscode/toast.ts
@@ -75,6 +75,22 @@ export class Toast {
     })
   }
 
+  static reportProgressError(
+    error: unknown,
+    progress: Progress<{
+      message?: string | undefined
+      increment?: number | undefined
+    }>
+  ) {
+    const message = (error as Error)?.message || 'an unexpected error occurred'
+
+    progress.report({
+      increment: 0,
+      message
+    })
+    return Toast.delayProgressClosing(60000)
+  }
+
   static delayProgressClosing(ms = 5000) {
     return delay(ms)
   }
diff --git a/package.json b/package.json
index 5a52863fa9..322bfb42f9 100644
--- a/package.json
+++ b/package.json
@@ -34,8 +34,8 @@
     "svgr": "yarn workspace dvc-vscode-webview svgr"
   },
   "devDependencies": {
-    "@typescript-eslint/eslint-plugin": "5.59.0",
-    "@typescript-eslint/parser": "5.59.0",
+    "@typescript-eslint/eslint-plugin": "5.59.1",
+    "@typescript-eslint/parser": "5.59.1",
     "@vscode/codicons": "0.0.32",
     "eslint": "8.39.0",
     "eslint-config-prettier": "8.8.0",
diff --git a/yarn.lock b/yarn.lock
index 0f482d7dcc..46820f1e67 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -5513,15 +5513,15 @@
   dependencies:
     "@types/node" "*"
 
-"@typescript-eslint/eslint-plugin@5.59.0":
-  version "5.59.0"
-  resolved "https://registry.yarnpkg.com/@typescript-eslint/eslint-plugin/-/eslint-plugin-5.59.0.tgz#c0e10eeb936debe5d1c3433cf36206a95befefd0"
-  integrity sha512-p0QgrEyrxAWBecR56gyn3wkG15TJdI//eetInP3zYRewDh0XS+DhB3VUAd3QqvziFsfaQIoIuZMxZRB7vXYaYw==
+"@typescript-eslint/eslint-plugin@5.59.1":
+  version "5.59.1"
+  resolved "https://registry.yarnpkg.com/@typescript-eslint/eslint-plugin/-/eslint-plugin-5.59.1.tgz#9b09ee1541bff1d2cebdcb87e7ce4a4003acde08"
+  integrity sha512-AVi0uazY5quFB9hlp2Xv+ogpfpk77xzsgsIEWyVS7uK/c7MZ5tw7ZPbapa0SbfkqE0fsAMkz5UwtgMLVk2BQAg==
   dependencies:
     "@eslint-community/regexpp" "^4.4.0"
-    "@typescript-eslint/scope-manager" "5.59.0"
-    "@typescript-eslint/type-utils" "5.59.0"
-    "@typescript-eslint/utils" "5.59.0"
+    "@typescript-eslint/scope-manager" "5.59.1"
+    "@typescript-eslint/type-utils" "5.59.1"
+    "@typescript-eslint/utils" "5.59.1"
     debug "^4.3.4"
     grapheme-splitter "^1.0.4"
     ignore "^5.2.0"
@@ -5536,14 +5536,14 @@
   dependencies:
     "@typescript-eslint/utils" "5.25.0"
 
-"@typescript-eslint/parser@5.59.0":
-  version "5.59.0"
-  resolved "https://registry.yarnpkg.com/@typescript-eslint/parser/-/parser-5.59.0.tgz#0ad7cd019346cc5d150363f64869eca10ca9977c"
-  integrity sha512-qK9TZ70eJtjojSUMrrEwA9ZDQ4N0e/AuoOIgXuNBorXYcBDk397D2r5MIe1B3cok/oCtdNC5j+lUUpVB+Dpb+w==
+"@typescript-eslint/parser@5.59.1":
+  version "5.59.1"
+  resolved "https://registry.yarnpkg.com/@typescript-eslint/parser/-/parser-5.59.1.tgz#73c2c12127c5c1182d2e5b71a8fa2a85d215cbb4"
+  integrity sha512-nzjFAN8WEu6yPRDizIFyzAfgK7nybPodMNFGNH0M9tei2gYnYszRDqVA0xlnRjkl7Hkx2vYrEdb6fP2a21cG1g==
   dependencies:
-    "@typescript-eslint/scope-manager" "5.59.0"
-    "@typescript-eslint/types" "5.59.0"
-    "@typescript-eslint/typescript-estree" "5.59.0"
+    "@typescript-eslint/scope-manager" "5.59.1"
+    "@typescript-eslint/types" "5.59.1"
+    "@typescript-eslint/typescript-estree" "5.59.1"
     debug "^4.3.4"
 
 "@typescript-eslint/scope-manager@5.17.0":
@@ -5570,13 +5570,21 @@
     "@typescript-eslint/types" "5.59.0"
     "@typescript-eslint/visitor-keys" "5.59.0"
 
-"@typescript-eslint/type-utils@5.59.0":
-  version "5.59.0"
-  resolved "https://registry.yarnpkg.com/@typescript-eslint/type-utils/-/type-utils-5.59.0.tgz#8e8d1420fc2265989fa3a0d897bde37f3851e8c9"
-  integrity sha512-d/B6VSWnZwu70kcKQSCqjcXpVH+7ABKH8P1KNn4K7j5PXXuycZTPXF44Nui0TEm6rbWGi8kc78xRgOC4n7xFgA==
+"@typescript-eslint/scope-manager@5.59.1":
+  version "5.59.1"
+  resolved "https://registry.yarnpkg.com/@typescript-eslint/scope-manager/-/scope-manager-5.59.1.tgz#8a20222719cebc5198618a5d44113705b51fd7fe"
+  integrity sha512-mau0waO5frJctPuAzcxiNWqJR5Z8V0190FTSqRw1Q4Euop6+zTwHAf8YIXNwDOT29tyUDrQ65jSg9aTU/H0omA==
   dependencies:
-    "@typescript-eslint/typescript-estree" "5.59.0"
-    "@typescript-eslint/utils" "5.59.0"
+    "@typescript-eslint/types" "5.59.1"
+    "@typescript-eslint/visitor-keys" "5.59.1"
+
+"@typescript-eslint/type-utils@5.59.1":
+  version "5.59.1"
+  resolved "https://registry.yarnpkg.com/@typescript-eslint/type-utils/-/type-utils-5.59.1.tgz#63981d61684fd24eda2f9f08c0a47ecb000a2111"
+  integrity sha512-ZMWQ+Oh82jWqWzvM3xU+9y5U7MEMVv6GLioM3R5NJk6uvP47kZ7YvlgSHJ7ERD6bOY7Q4uxWm25c76HKEwIjZw==
+  dependencies:
+    "@typescript-eslint/typescript-estree" "5.59.1"
+    "@typescript-eslint/utils" "5.59.1"
     debug "^4.3.4"
     tsutils "^3.21.0"
 
@@ -5595,6 +5603,11 @@
   resolved "https://registry.yarnpkg.com/@typescript-eslint/types/-/types-5.59.0.tgz#3fcdac7dbf923ec5251545acdd9f1d42d7c4fe32"
   integrity sha512-yR2h1NotF23xFFYKHZs17QJnB51J/s+ud4PYU4MqdZbzeNxpgUr05+dNeCN/bb6raslHvGdd6BFCkVhpPk/ZeA==
 
+"@typescript-eslint/types@5.59.1":
+  version "5.59.1"
+  resolved "https://registry.yarnpkg.com/@typescript-eslint/types/-/types-5.59.1.tgz#03f3fedd1c044cb336ebc34cc7855f121991f41d"
+  integrity sha512-dg0ICB+RZwHlysIy/Dh1SP+gnXNzwd/KS0JprD3Lmgmdq+dJAJnUPe1gNG34p0U19HvRlGX733d/KqscrGC1Pg==
+
 "@typescript-eslint/typescript-estree@5.17.0":
   version "5.17.0"
   resolved "https://registry.yarnpkg.com/@typescript-eslint/typescript-estree/-/typescript-estree-5.17.0.tgz#a7cba7dfc8f9cc2ac78c18584e684507df4f2488"
@@ -5634,6 +5647,19 @@
     semver "^7.3.7"
     tsutils "^3.21.0"
 
+"@typescript-eslint/typescript-estree@5.59.1":
+  version "5.59.1"
+  resolved "https://registry.yarnpkg.com/@typescript-eslint/typescript-estree/-/typescript-estree-5.59.1.tgz#4aa546d27fd0d477c618f0ca00b483f0ec84c43c"
+  integrity sha512-lYLBBOCsFltFy7XVqzX0Ju+Lh3WPIAWxYpmH/Q7ZoqzbscLiCW00LeYCdsUnnfnj29/s1WovXKh2gwCoinHNGA==
+  dependencies:
+    "@typescript-eslint/types" "5.59.1"
+    "@typescript-eslint/visitor-keys" "5.59.1"
+    debug "^4.3.4"
+    globby "^11.1.0"
+    is-glob "^4.0.3"
+    semver "^7.3.7"
+    tsutils "^3.21.0"
+
 "@typescript-eslint/utils@5.25.0":
   version "5.25.0"
   resolved "https://registry.yarnpkg.com/@typescript-eslint/utils/-/utils-5.25.0.tgz#272751fd737733294b4ab95e16c7f2d4a75c2049"
@@ -5646,17 +5672,17 @@
     eslint-scope "^5.1.1"
     eslint-utils "^3.0.0"
 
-"@typescript-eslint/utils@5.59.0", "@typescript-eslint/utils@^5.58.0":
-  version "5.59.0"
-  resolved "https://registry.yarnpkg.com/@typescript-eslint/utils/-/utils-5.59.0.tgz#063d066b3bc4850c18872649ed0da9ee72d833d5"
-  integrity sha512-GGLFd+86drlHSvPgN/el6dRQNYYGOvRSDVydsUaQluwIW3HvbXuxyuD5JETvBt/9qGYe+lOrDk6gRrWOHb/FvA==
+"@typescript-eslint/utils@5.59.1":
+  version "5.59.1"
+  resolved "https://registry.yarnpkg.com/@typescript-eslint/utils/-/utils-5.59.1.tgz#d89fc758ad23d2157cfae53f0b429bdf15db9473"
+  integrity sha512-MkTe7FE+K1/GxZkP5gRj3rCztg45bEhsd8HYjczBuYm+qFHP5vtZmjx3B0yUCDotceQ4sHgTyz60Ycl225njmA==
   dependencies:
     "@eslint-community/eslint-utils" "^4.2.0"
     "@types/json-schema" "^7.0.9"
     "@types/semver" "^7.3.12"
-    "@typescript-eslint/scope-manager" "5.59.0"
-    "@typescript-eslint/types" "5.59.0"
-    "@typescript-eslint/typescript-estree" "5.59.0"
+    "@typescript-eslint/scope-manager" "5.59.1"
+    "@typescript-eslint/types" "5.59.1"
+    "@typescript-eslint/typescript-estree" "5.59.1"
     eslint-scope "^5.1.1"
     semver "^7.3.7"
 
@@ -5672,6 +5698,20 @@
     eslint-scope "^5.1.1"
     eslint-utils "^3.0.0"
 
+"@typescript-eslint/utils@^5.58.0":
+  version "5.59.0"
+  resolved "https://registry.yarnpkg.com/@typescript-eslint/utils/-/utils-5.59.0.tgz#063d066b3bc4850c18872649ed0da9ee72d833d5"
+  integrity sha512-GGLFd+86drlHSvPgN/el6dRQNYYGOvRSDVydsUaQluwIW3HvbXuxyuD5JETvBt/9qGYe+lOrDk6gRrWOHb/FvA==
+  dependencies:
+    "@eslint-community/eslint-utils" "^4.2.0"
+    "@types/json-schema" "^7.0.9"
+    "@types/semver" "^7.3.12"
+    "@typescript-eslint/scope-manager" "5.59.0"
+    "@typescript-eslint/types" "5.59.0"
+    "@typescript-eslint/typescript-estree" "5.59.0"
+    eslint-scope "^5.1.1"
+    semver "^7.3.7"
+
 "@typescript-eslint/visitor-keys@5.17.0":
   version "5.17.0"
   resolved "https://registry.yarnpkg.com/@typescript-eslint/visitor-keys/-/visitor-keys-5.17.0.tgz#52daae45c61b0211b4c81b53a71841911e479128"
@@ -5696,6 +5736,14 @@
     "@typescript-eslint/types" "5.59.0"
     eslint-visitor-keys "^3.3.0"
 
+"@typescript-eslint/visitor-keys@5.59.1":
+  version "5.59.1"
+  resolved "https://registry.yarnpkg.com/@typescript-eslint/visitor-keys/-/visitor-keys-5.59.1.tgz#0d96c36efb6560d7fb8eb85de10442c10d8f6058"
+  integrity sha512-6waEYwBTCWryx0VJmP7JaM4FpipLsFl9CvYf2foAE8Qh/Y0s+bxWysciwOs0LTBED4JCaNxTZ5rGadB14M6dwA==
+  dependencies:
+    "@typescript-eslint/types" "5.59.1"
+    eslint-visitor-keys "^3.3.0"
+
 "@ungap/promise-all-settled@1.1.2":
   version "1.1.2"
   resolved "https://registry.yarnpkg.com/@ungap/promise-all-settled/-/promise-all-settled-1.1.2.tgz#aa58042711d6e3275dd37dc597e5d31e8c290a44"