diff --git a/Makefile b/Makefile
index 03780a03ec4..016d03484b1 100644
--- a/Makefile
+++ b/Makefile
@@ -375,6 +375,7 @@ create-cluster: ## Create a workload development Kubernetes cluster on Azure in
 	EXP_CLUSTER_RESOURCE_SET=true \
 	EXP_MACHINE_POOL=true \
 	EXP_EDGEZONE=true \
+	EXP_ASO_API=true \
 	$(MAKE) create-management-cluster \
 	create-workload-cluster
 
@@ -730,7 +731,7 @@ tilt-up: install-tools kind-create ## Start tilt and build kind cluster if neede
 	@if [ -z "${AZURE_CLIENT_ID_USER_ASSIGNED_IDENTITY}" ]; then \
 		export AZURE_CLIENT_ID_USER_ASSIGNED_IDENTITY=$(shell cat $(AZURE_IDENTITY_ID_FILEPATH)); \
 	fi; \
-	CLUSTER_TOPOLOGY=true EXP_CLUSTER_RESOURCE_SET=true EXP_MACHINE_POOL=true EXP_KUBEADM_BOOTSTRAP_FORMAT_IGNITION=true EXP_EDGEZONE=true tilt up
+	CLUSTER_TOPOLOGY=true EXP_ASO_API=true EXP_CLUSTER_RESOURCE_SET=true EXP_MACHINE_POOL=true EXP_KUBEADM_BOOTSTRAP_FORMAT_IGNITION=true EXP_EDGEZONE=true tilt up
 
 .PHONY: delete-cluster
 delete-cluster: delete-workload-cluster  ## Deletes the example kind cluster "capz".
diff --git a/hack/observability/opentelemetry/controller-manager-patch.yaml b/hack/observability/opentelemetry/controller-manager-patch.yaml
index e80de6a73c5..9d0fc5bd1f8 100644
--- a/hack/observability/opentelemetry/controller-manager-patch.yaml
+++ b/hack/observability/opentelemetry/controller-manager-patch.yaml
@@ -12,5 +12,5 @@ spec:
             - "--diagnostics-address=:8080"
             - "--insecure-diagnostics"
             - "--leader-elect"
-            - "--feature-gates=MachinePool=${EXP_MACHINE_POOL:=false},AKSResourceHealth=${EXP_AKS_RESOURCE_HEALTH:=false},EdgeZone=${EXP_EDGEZONE:=false},ASOAPI=${EXP_ASO_API:=false}"
+            - "--feature-gates=MachinePool=${EXP_MACHINE_POOL:=false},AKSResourceHealth=${EXP_AKS_RESOURCE_HEALTH:=false},EdgeZone=${EXP_EDGEZONE:=false},ASOAPI=${EXP_ASO_API:=true}"
             - "--enable-tracing"
diff --git a/templates/flavors/aks-aso/credentials.yaml b/templates/flavors/aks-aso/credentials.yaml
index 5265763a152..90a2edd86f7 100644
--- a/templates/flavors/aks-aso/credentials.yaml
+++ b/templates/flavors/aks-aso/credentials.yaml
@@ -5,5 +5,5 @@ metadata:
 stringData:
  AZURE_SUBSCRIPTION_ID: ${AZURE_SUBSCRIPTION_ID}
  AZURE_TENANT_ID:       ${AZURE_TENANT_ID}
- AZURE_CLIENT_ID:       ${AZURE_CLIENT_ID}
- AUTH_MODE:             ${ASO_CREDENTIAL_SECRET_MODE}
+ AZURE_CLIENT_ID:       ${AZURE_CLIENT_ID_USER_ASSIGNED_IDENTITY}
+ AUTH_MODE:             ${ASO_CREDENTIAL_SECRET_MODE:-workloadidentity}