diff --git a/azure/services/vmextensions/vmextensions.go b/azure/services/vmextensions/vmextensions.go
index a19694eb53a..b5fe35dbfee 100644
--- a/azure/services/vmextensions/vmextensions.go
+++ b/azure/services/vmextensions/vmextensions.go
@@ -19,9 +19,8 @@ package vmextensions
 import (
 	"context"
 
-	"github.com/Azure/azure-sdk-for-go/services/compute/mgmt/2021-04-01/compute"
-	"github.com/Azure/go-autorest/autorest/to"
 	"github.com/pkg/errors"
+	infrav1 "sigs.k8s.io/cluster-api-provider-azure/api/v1beta1"
 	"sigs.k8s.io/cluster-api-provider-azure/azure"
 	"sigs.k8s.io/cluster-api-provider-azure/azure/services/async"
 	"sigs.k8s.io/cluster-api-provider-azure/util/reconciler"
@@ -34,9 +33,7 @@ const serviceName = "vmextensions"
 type VMExtensionScope interface {
 	azure.Authorizer
 	azure.AsyncStatusUpdater
-	azure.ClusterDescriber
 	VMExtensionSpecs() []azure.ResourceSpecGetter
-	SetBootstrapConditions(context.Context, string, string) error
 }
 
 // Service provides operations on Azure resources.
@@ -77,25 +74,21 @@ func (s *Service) Reconcile(ctx context.Context) error {
 	//  Order of precedence (highest -> lowest) is: error that is not an operationNotDoneError (i.e. error creating) -> operationNotDoneError (i.e. creating in progress) -> no error (i.e. created)
 	var resultErr error
 	for _, extensionSpec := range specs {
-		result, err := s.CreateResource(ctx, extensionSpec, serviceName)
+		_, err := s.CreateResource(ctx, extensionSpec, serviceName)
 		if err != nil {
 			if !azure.IsOperationNotDoneError(err) || resultErr == nil {
 				resultErr = err
 			}
-		} else {
-			vmextension, ok := result.(compute.VirtualMachineExtension)
-			if !ok {
-				return errors.Errorf("%T is not a compute.VirtualMachineExtension", result)
-			}
-
-			// check the extension status and set the associated conditions.
-			if retErr := s.Scope.SetBootstrapConditions(ctx, to.String(vmextension.ProvisioningState), extensionSpec.ResourceName()); retErr != nil {
-				// TODO: what precedence should this error have?
-				return retErr
-			}
 		}
 	}
 
+	if azure.IsOperationNotDoneError(resultErr) {
+		resultErr = errors.Wrapf(resultErr, "extension is still in provisioning state. This likely means that bootstrapping has not yet completed on the VM")
+	} else if resultErr != nil {
+		resultErr = errors.Wrapf(resultErr, "extension state failed. This likely means the Kubernetes node bootstrapping process failed or timed out. Check VM boot diagnostics logs to learn more")
+	}
+
+	s.Scope.UpdatePutStatus(infrav1.BootstrapSucceededCondition, serviceName, resultErr)
 	return resultErr
 }