diff --git a/crates/agent/src/agent.rs b/crates/agent/src/agent.rs
index 160172c5c49d3af5548ccd76af1e441662fadfbb..6765b45daec799fa7df9608065d165296119f6e6 100644
--- a/crates/agent/src/agent.rs
+++ b/crates/agent/src/agent.rs
@@ -755,10 +755,9 @@ impl NativeAgent {
 
         for session in self.sessions.values_mut() {
             session.thread.update(cx, |thread, cx| {
-                let should_update_model = thread.model().is_none()
-                    || (thread.is_empty()
-                        && matches!(event, language_model::Event::DefaultModelChanged));
-                if should_update_model && let Some(model) = default_model.clone() {
+                if thread.model().is_none()
+                    && let Some(model) = default_model.clone()
+                {
                     thread.set_model(model, cx);
                     cx.notify();
                 }
diff --git a/crates/language_models/src/language_models.rs b/crates/language_models/src/language_models.rs
index bd29dbe08dbd16af25be4bd55b44067f47fa2a8a..d604ee432e487cdf2d917b0ae01980ba9fb39f24 100644
--- a/crates/language_models/src/language_models.rs
+++ b/crates/language_models/src/language_models.rs
@@ -119,19 +119,6 @@ pub fn init(user_store: Entity<UserStore>, client: Arc<Client>, cx: &mut App) {
         );
     });
 
-    cx.subscribe(
-        &registry,
-        |_registry, event: &language_model::Event, cx| match event {
-            language_model::Event::ProviderStateChanged(_)
-            | language_model::Event::AddedProvider(_)
-            | language_model::Event::RemovedProvider(_) => {
-                update_environment_fallback_model(cx);
-            }
-            _ => {}
-        },
-    )
-    .detach();
-
     let registry = registry.downgrade();
     cx.observe_global::<SettingsStore>(move |cx| {
         let Some(registry) = registry.upgrade() else {
diff --git a/crates/language_models/src/provider/cloud.rs b/crates/language_models/src/provider/cloud.rs
index 9fef05e7555bc55a0ea6a3081280ea85e201dca9..ffa4bcb9863da958ac76c272dcd667649ef4bb6a 100644
--- a/crates/language_models/src/provider/cloud.rs
+++ b/crates/language_models/src/provider/cloud.rs
@@ -1,5 +1,6 @@
 use ai_onboarding::YoungAccountBanner;
 use anyhow::Result;
+use client::Status;
 use client::{Client, RefreshLlmTokenListener, UserStore, global_llm_token, zed_urls};
 use cloud_api_client::LlmApiToken;
 use cloud_api_types::OrganizationId;
@@ -249,11 +250,21 @@ impl LanguageModelProvider for CloudLanguageModelProvider {
 
     fn is_authenticated(&self, cx: &App) -> bool {
         let state = self.state.read(cx);
-        !state.is_signed_out(cx)
+        let status = *state.client.status().borrow();
+        matches!(status, Status::Authenticated | Status::Connected { .. })
     }
 
-    fn authenticate(&self, _cx: &mut App) -> Task<Result<(), AuthenticateError>> {
-        Task::ready(Ok(()))
+    fn authenticate(&self, cx: &mut App) -> Task<Result<(), AuthenticateError>> {
+        let mut status = self.state.read(cx).client.status();
+        if !status.borrow().is_signing_in() {
+            return Task::ready(Ok(()));
+        }
+        cx.background_spawn(async move {
+            while status.borrow().is_signing_in() {
+                status.next().await;
+            }
+            Ok(())
+        })
     }
 
     fn configuration_view(