diff --git a/editors/code/src/main.ts b/editors/code/src/main.ts
index a9847dd2a6..ae14523479 100644
--- a/editors/code/src/main.ts
+++ b/editors/code/src/main.ts
@@ -33,7 +33,7 @@ export function outputChannel() {
 }
 
 export interface RustAnalyzerExtensionApi {
-    client: lc.LanguageClient;
+    client?: lc.LanguageClient;
 }
 
 export async function activate(
@@ -48,6 +48,23 @@ export async function activate(
 }
 
 async function tryActivate(context: vscode.ExtensionContext): Promise<RustAnalyzerExtensionApi> {
+    // We only support local folders, not eg. Live Share (`vlsl:` scheme), so don't activate if
+    // only those are in use.
+    // (r-a still somewhat works with Live Share, because commands are tunneled to the host)
+    const folders = (vscode.workspace.workspaceFolders || []).filter((folder) =>
+        folder.uri.scheme == "file"
+    );
+    const rustDocuments = vscode.workspace.textDocuments.filter((document) =>
+        isRustDocument(document)
+    );
+
+    if (folders.length == 0 && rustDocuments.length == 0) {
+        // FIXME: Ideally we would choose not to activate at all (and avoid registering
+        // non-functional editor commands), but VS Code doesn't seem to have a good way of doing
+        // that
+        return {};
+    }
+
     const config = new Config(context);
     const state = new PersistentState(context.globalState);
     const serverPath = await bootstrap(context, config, state).catch((err) => {
@@ -60,18 +77,11 @@ async function tryActivate(context: vscode.ExtensionContext): Promise<RustAnalyz
         throw new Error(message);
     });
 
-    if ((vscode.workspace.workspaceFolders || []).length === 0) {
-        const rustDocuments = vscode.workspace.textDocuments.filter((document) =>
-            isRustDocument(document)
-        );
-        if (rustDocuments.length > 0) {
-            ctx = await Ctx.create(config, context, serverPath, {
-                kind: "Detached Files",
-                files: rustDocuments,
-            });
-        } else {
-            throw new Error("no rust files are opened");
-        }
+    if (folders.length === 0) {
+        ctx = await Ctx.create(config, context, serverPath, {
+            kind: "Detached Files",
+            files: rustDocuments,
+        });
     } else {
         // Note: we try to start the server before we activate type hints so that it
         // registers its `onDidChangeDocument` handler before us.