diff --git a/Changes b/Changes
index ae31b100d..9e5dc0ff3 100644
--- a/Changes
+++ b/Changes
@@ -176,6 +176,7 @@ Verilator 5.051 devel
 * Fix folding of short circuiting operators guarding member access (#8238). [Geza Lore, Testorrent USA, Inc.]
 * Fix MULTIDRIVENPROC on static loop induction variables (#8242). [Geza Lore, Testorrent USA, Inc.]
 * Fix multiply undefined behavior on signed int overflow (#8247) (#8248). [Paul Rigge]
+* Fix initial statements with gate optimizaion (#8250). [Prithayan Barua]
 
 
 Verilator 5.050 2026-07-01
diff --git a/src/V3AstInlines.h b/src/V3AstInlines.h
index 0dd1f5953..ef91c2408 100644
--- a/src/V3AstInlines.h
+++ b/src/V3AstInlines.h
@@ -146,6 +146,7 @@ bool AstBasicDType::ascending() const {
 
 bool AstActive::hasClocked() const { return m_sentreep->hasClocked(); }
 bool AstActive::hasCombo() const { return m_sentreep->hasCombo(); }
+bool AstActive::hasInitial() const { return m_sentreep->hasInitial(); }
 bool AstActive::hasStatic() const { return m_sentreep->hasStatic(); }
 
 AstAlways::AstAlways(AstAssignW* assignp)
diff --git a/src/V3AstNodeOther.h b/src/V3AstNodeOther.h
index 9d672ab35..1f3f46c43 100644
--- a/src/V3AstNodeOther.h
+++ b/src/V3AstNodeOther.h
@@ -460,6 +460,7 @@ public:
     // METHODS
     inline bool hasClocked() const;
     inline bool hasCombo() const;
+    inline bool hasInitial() const;
     inline bool hasStatic() const;
 };
 class AstAlias final : public AstNode {
diff --git a/src/V3Gate.cpp b/src/V3Gate.cpp
index 5aa74f81e..beec484e0 100644
--- a/src/V3Gate.cpp
+++ b/src/V3Gate.cpp
@@ -201,6 +201,7 @@ class GateBuildVisitor final : public VNVisitorConst {
     bool m_inClockedActive = false;  // Underneath clocked active
     bool m_inEdgeActive = false;  // Underneath edge active
     bool m_inStaticActive = false;  // Underneath static active
+    bool m_inInitialActive = false;  // Underneath initial active
     bool m_inSenItem = false;  // Underneath AstSenItem; any varrefs are clocks
 
     // METHODS
@@ -224,7 +225,8 @@ class GateBuildVisitor final : public VNVisitorConst {
             m_logicVertexp->clearReducibleAndDedupable(nonReducibleReason);
         } else if (m_inClockedActive) {
             m_logicVertexp->clearReducible("Clocked logic");  // but dedupable
-        } else if (m_inStaticActive) {
+        } else if (m_inStaticActive || m_inInitialActive) {
+            // Runs only once, so its output must not be treated as live combinational logic
             m_logicVertexp->setStaticInit();
         }
         if (consumeReason) m_logicVertexp->setConsumed(consumeReason);
@@ -251,10 +253,12 @@ class GateBuildVisitor final : public VNVisitorConst {
         VL_RESTORER(m_inClockedActive);
         VL_RESTORER(m_inEdgeActive);
         VL_RESTORER(m_inStaticActive);
+        VL_RESTORER(m_inInitialActive);
         m_activep = nodep;
         m_inClockedActive = nodep->hasClocked();
         m_inEdgeActive = nodep->sentreep() && nodep->sentreep()->hasEdge();
         m_inStaticActive = nodep->hasStatic();
+        m_inInitialActive = nodep->hasInitial();
 
         // AstVarScope::user2 -> bool: Signal used in SenItem in *this* active block
         const VNUser2InUse user2InUse;