diff --git a/cli/azd/extensions/azure.ai.agents/internal/cmd/init.go b/cli/azd/extensions/azure.ai.agents/internal/cmd/init.go
index 71587ae8d84..456086be442 100644
--- a/cli/azd/extensions/azure.ai.agents/internal/cmd/init.go
+++ b/cli/azd/extensions/azure.ai.agents/internal/cmd/init.go
@@ -755,10 +755,13 @@ func (a *InitAction) parseAndSetProjectResourceId(ctx context.Context) error {
 					},
 				})
 				if err != nil {
-					fmt.Printf("failed to prompt for connection selection: %v\n", err)
-				} else {
-					selectedConnection = &appInsightsConnections[int(*selectResp.Value)]
+					return fmt.Errorf("prompting for Application Insights connection selection: %w", err)
 				}
+				selectedConnection = &appInsightsConnections[int(*selectResp.Value)]
+			}
+
+			if selectedConnection.Credentials.Key == "" {
+				return fmt.Errorf("Application Insights connection '%s' has no credentials key", selectedConnection.Name)
 			}
 
 			if err := a.setEnvVar(ctx, "APPLICATIONINSIGHTS_CONNECTION_STRING", selectedConnection.Credentials.Key); err != nil {