diff --git a/bundle/manifests/servicemeshoperator3.clusterserviceversion.yaml b/bundle/manifests/servicemeshoperator3.clusterserviceversion.yaml
index 902229b33e..67e4bb173a 100644
--- a/bundle/manifests/servicemeshoperator3.clusterserviceversion.yaml
+++ b/bundle/manifests/servicemeshoperator3.clusterserviceversion.yaml
@@ -45,7 +45,7 @@ metadata:
     capabilities: Seamless Upgrades
     categories: OpenShift Optional, Integration & Delivery, Networking, Security
     containerImage: ${OSSM_OPERATOR_3_2}
-    createdAt: "2025-11-26T08:45:22Z"
+    createdAt: "2025-12-01T11:20:08Z"
     description: The OpenShift Service Mesh Operator enables you to install, configure, and manage an instance of Red Hat OpenShift Service Mesh. OpenShift Service Mesh is based on the open source Istio project.
     features.operators.openshift.io/cnf: "false"
     features.operators.openshift.io/cni: "true"
diff --git a/chart/values.yaml b/chart/values.yaml
index 2ad37ed418..588659d6e6 100644
--- a/chart/values.yaml
+++ b/chart/values.yaml
@@ -1,39 +1,7 @@
 name: sailoperator
 deployment:
   name: sail-operator
-  annotations:
-    images.v1_27_3.ztunnel: gcr.io/istio-release/ztunnel:1.27.3
-    images.v1_27_3.istiod: gcr.io/istio-release/pilot:1.27.3
-    images.v1_27_3.proxy: gcr.io/istio-release/proxyv2:1.27.3
-    images.v1_27_3.cni: gcr.io/istio-release/install-cni:1.27.3
-    images.v1_26_4.ztunnel: gcr.io/istio-release/ztunnel:1.26.4
-    images.v1_26_4.istiod: gcr.io/istio-release/pilot:1.26.4
-    images.v1_26_4.proxy: gcr.io/istio-release/proxyv2:1.26.4
-    images.v1_26_4.cni: gcr.io/istio-release/install-cni:1.26.4
-    images.v1_26_3.ztunnel: gcr.io/istio-release/ztunnel:1.26.3
-    images.v1_26_3.istiod: gcr.io/istio-release/pilot:1.26.3
-    images.v1_26_3.proxy: gcr.io/istio-release/proxyv2:1.26.3
-    images.v1_26_3.cni: gcr.io/istio-release/install-cni:1.26.3
-    images.v1_26_2.ztunnel: gcr.io/istio-release/ztunnel:1.26.2
-    images.v1_26_2.istiod: gcr.io/istio-release/pilot:1.26.2
-    images.v1_26_2.proxy: gcr.io/istio-release/proxyv2:1.26.2
-    images.v1_26_2.cni: gcr.io/istio-release/install-cni:1.26.2
-    images.v1_24_6.ztunnel: gcr.io/istio-release/ztunnel:1.24.6
-    images.v1_24_6.istiod: gcr.io/istio-release/pilot:1.24.6
-    images.v1_24_6.proxy: gcr.io/istio-release/proxyv2:1.24.6
-    images.v1_24_6.cni: gcr.io/istio-release/install-cni:1.24.6
-    images.v1_24_5.ztunnel: gcr.io/istio-release/ztunnel:1.24.5
-    images.v1_24_5.istiod: gcr.io/istio-release/pilot:1.24.5
-    images.v1_24_5.proxy: gcr.io/istio-release/proxyv2:1.24.5
-    images.v1_24_5.cni: gcr.io/istio-release/install-cni:1.24.5
-    images.v1_24_4.ztunnel: gcr.io/istio-release/ztunnel:1.24.4
-    images.v1_24_4.istiod: gcr.io/istio-release/pilot:1.24.4
-    images.v1_24_4.proxy: gcr.io/istio-release/proxyv2:1.24.4
-    images.v1_24_4.cni: gcr.io/istio-release/install-cni:1.24.4
-    images.v1_24_3.ztunnel: gcr.io/istio-release/ztunnel:1.24.3
-    images.v1_24_3.istiod: gcr.io/istio-release/pilot:1.24.3
-    images.v1_24_3.proxy: gcr.io/istio-release/proxyv2:1.24.3
-    images.v1_24_3.cni: gcr.io/istio-release/install-cni:1.24.3
+  annotations: {}
 service:
   port: 8443
 serviceAccountName: sail-operator
diff --git a/ossm/merge_upstream.sh b/ossm/merge_upstream.sh
index 7f30c1e148..4d08224c08 100755
--- a/ossm/merge_upstream.sh
+++ b/ossm/merge_upstream.sh
@@ -75,6 +75,9 @@ main () {
   rm -rf bundle/**/*.yaml resources bundle.Dockerfile
   # TODO, fix this to add versions not replacing them
   #updateVersionsInOssmValuesYaml
+  # even if we specify ossm/values.yaml via HELM_VALUES_FILE, helm by design merges annotations specified in chart/values.yaml and ossm/values.yaml
+  # to only keep annotations specified in ossm/values.yaml, it's necessary to overwrite all annotations in chart/values.yaml
+  yq -i '.deployment.annotations = {}' chart/values.yaml
   make gen
   git add .
 
diff --git a/ossm/values.yaml b/ossm/values.yaml
index f4293c8540..2f93d0a895 100644
--- a/ossm/values.yaml
+++ b/ossm/values.yaml
@@ -1,6 +1,8 @@
 name: servicemeshoperator3
 deployment:
   name: servicemesh-operator3
+  # even if we specify ossm/values.yaml via HELM_VALUES_FILE, helm by design merges annotations specified in chart/values.yaml and ossm/values.yaml
+  # to only keep annotations specified in ossm/values.yaml, it's necessary to overwrite all annotations in chart/values.yaml. This is done when merging upstream changes via ossm/merge_upstream.sh
   annotations:
     # 1.24.3 images are hardcoded to versions released with 3.0.0
     images.v1_24_3.istiod: registry.redhat.io/openshift-service-mesh/istio-pilot-rhel9@sha256:d6693c31d6137c4219812cf69097d04654b296e0ab059dc48596a09b9cd124b1