Merge branch 'main' into bsoghigian/e2e/nic-gc

go.mod

@@ -3,6 +3,7 @@ module github.com/Azure/karpenter-provider-azure
 go 1.23.6
 
 require (
+	github.com/Azure/aks-middleware v0.0.30
 	github.com/Azure/azure-kusto-go v0.16.1
 	github.com/Azure/azure-sdk-for-go v68.0.0+incompatible
 	github.com/Azure/azure-sdk-for-go-extensions v0.1.8
@@ -107,7 +108,7 @@ require (
 	github.com/google/gofuzz v1.2.0 // indirect
 	github.com/google/pprof v0.0.0-20241210010833-40e02aabc2ad // indirect
 	github.com/google/uuid v1.6.0 // indirect
-	github.com/grpc-ecosystem/grpc-gateway/v2 v2.21.0 // indirect
+	github.com/grpc-ecosystem/grpc-gateway/v2 v2.24.0 // indirect
 	github.com/hashicorp/golang-lru v1.0.2 // indirect
 	github.com/inconshreveable/mousetrap v1.1.0 // indirect
 	github.com/josharian/intern v1.0.0 // indirect
@@ -145,17 +146,17 @@ require (
 	golang.org/x/crypto v0.33.0 // indirect
 	golang.org/x/exp v0.0.0-20240808152545-0cdaa3abc0fa // indirect
 	golang.org/x/net v0.35.0 // indirect
-	golang.org/x/oauth2 v0.22.0 // indirect
+	golang.org/x/oauth2 v0.24.0 // indirect
 	golang.org/x/sys v0.30.0 // indirect
 	golang.org/x/term v0.29.0 // indirect
 	golang.org/x/text v0.22.0 // indirect
 	golang.org/x/time v0.6.0 // indirect
 	golang.org/x/tools v0.28.0 // indirect
 	gomodules.xyz/jsonpatch/v2 v2.4.0 // indirect
 	google.golang.org/api v0.183.0 // indirect
-	google.golang.org/genproto/googleapis/api v0.0.0-20240808171019-573a1156607a // indirect
-	google.golang.org/genproto/googleapis/rpc v0.0.0-20240808171019-573a1156607a // indirect
-	google.golang.org/grpc v1.65.0 // indirect
+	google.golang.org/genproto/googleapis/api v0.0.0-20241118233622-e639e219e697 // indirect
+	google.golang.org/genproto/googleapis/rpc v0.0.0-20241118233622-e639e219e697 // indirect
+	google.golang.org/grpc v1.68.0 // indirect
 	google.golang.org/protobuf v1.36.1 // indirect
 	gopkg.in/dnaeon/go-vcr.v3 v3.2.0 // indirect
 	gopkg.in/inf.v0 v0.9.1 // indirect

go.sum

@@ -35,6 +35,8 @@ contrib.go.opencensus.io/exporter/ocagent v0.7.1-0.20200907061046-05415f1de66d/g
 contrib.go.opencensus.io/exporter/prometheus v0.4.2 h1:sqfsYl5GIY/L570iT+l93ehxaWJs2/OwXtiWwew3oAg=
 contrib.go.opencensus.io/exporter/prometheus v0.4.2/go.mod h1:dvEHbiKmgvbr5pjaF9fpw1KeYcjrnC1J8B+JKjsZyRQ=
 dmitri.shuralyov.com/gpu/mtl v0.0.0-20190408044501-666a987793e9/go.mod h1:H6x//7gZCb22OMCxBHrMx7a5I7Hp++hsVxbQ4BYO7hU=
+github.com/Azure/aks-middleware v0.0.30 h1:WhZwYwDYkA0hgCwywYZgR3GyQeNGri6rucC/uJrvREM=
+github.com/Azure/aks-middleware v0.0.30/go.mod h1:02sVX8v7HPSNuVL3NFBVwmRxyzriyWMU7IwJeDmkZvM=
 github.com/Azure/azure-kusto-go v0.16.1 h1:vCBWcQghmC1qIErUUgVNWHxGhZVStu1U/hki6iBA14k=
 github.com/Azure/azure-kusto-go v0.16.1/go.mod h1:9F2zvXH8B6eWzgI1S4k1ZXAIufnBZ1bv1cW1kB1n3D0=
 github.com/Azure/azure-sdk-for-go v68.0.0+incompatible h1:fcYLmCpyNYRnvJbPerq7U0hS+6+I79yEDJBqVNcqUzU=
@@ -302,8 +304,8 @@ github.com/google/uuid v1.6.0/go.mod h1:TIyPZe4MgqvfeYDBFedMoGGpEw/LqOeaOT+nhxU+
 github.com/googleapis/gax-go/v2 v2.0.4/go.mod h1:0Wqv26UfaUD9n4G6kQubkQ+KchISgw+vpHVxEJEs9eg=
 github.com/googleapis/gax-go/v2 v2.0.5/go.mod h1:DWXyrwAJ9X0FpwwEdw+IPEYBICEFu5mhpdKc/us6bOk=
 github.com/grpc-ecosystem/grpc-gateway v1.14.6/go.mod h1:zdiPV4Yse/1gnckTHtghG4GkDEdKCRJduHpTxT3/jcw=
-github.com/grpc-ecosystem/grpc-gateway/v2 v2.21.0 h1:CWyXh/jylQWp2dtiV33mY4iSSp6yf4lmn+c7/tN+ObI=
-github.com/grpc-ecosystem/grpc-gateway/v2 v2.21.0/go.mod h1:nCLIt0w3Ept2NwF8ThLmrppXsfT07oC8k0XNDxd8sVU=
+github.com/grpc-ecosystem/grpc-gateway/v2 v2.24.0 h1:TmHmbvxPmaegwhDubVz0lICL0J5Ka2vwTzhoePEXsGE=
+github.com/grpc-ecosystem/grpc-gateway/v2 v2.24.0/go.mod h1:qztMSjm835F2bXf+5HKAPIS5qsmQDqZna/PgVt4rWtI=
 github.com/hashicorp/golang-lru v0.5.0/go.mod h1:/m3WP610KZHVQ1SGc6re/UDhFvYD7pJ4Ao+sR/qLZy8=
 github.com/hashicorp/golang-lru v0.5.1/go.mod h1:/m3WP610KZHVQ1SGc6re/UDhFvYD7pJ4Ao+sR/qLZy8=
 github.com/hashicorp/golang-lru v1.0.2 h1:dV3g9Z/unq5DpblPpw+Oqcv4dU/1omnb4Ok8iPY6p1c=
@@ -429,8 +431,8 @@ github.com/robfig/cron/v3 v3.0.1 h1:WdRxkvbJztn8LMz/QEvLN5sBU+xKpSqwwUO1Pjr4qDs=
 github.com/robfig/cron/v3 v3.0.1/go.mod h1:eQICP3HwyT7UooqI/z+Ov+PtYAWygg1TEWWzGIFLtro=
 github.com/rogpeppe/fastuuid v1.2.0/go.mod h1:jVj6XXZzXRy/MSR5jhDC/2q6DgLz+nrA6LYCDYWNEvQ=
 github.com/rogpeppe/go-internal v1.3.0/go.mod h1:M8bDsm7K2OlrFYOpmOWEs/qY81heoFRclV5y23lUDJ4=
-github.com/rogpeppe/go-internal v1.12.0 h1:exVL4IDcn6na9z1rAb56Vxr+CgyK3nn3O+epU5NdKM8=
-github.com/rogpeppe/go-internal v1.12.0/go.mod h1:E+RYuTGaKKdloAfM02xzb0FW3Paa99yedzYV+kq4uf4=
+github.com/rogpeppe/go-internal v1.13.1 h1:KvO1DLK/DRN07sQ1LQKScxyZJuNnedQ5/wKSR38lUII=
+github.com/rogpeppe/go-internal v1.13.1/go.mod h1:uMEvuHeurkdAXX61udpOXGD/AzZDWNMNyH2VO9fmH0o=
 github.com/russross/blackfriday/v2 v2.1.0/go.mod h1:+Rmxgy9KzJVeS9/2gXHxylqXiyQDYRxCVz55jmeOWTM=
 github.com/samber/lo v1.49.1 h1:4BIFyVfuQSEpluc7Fua+j1NolZHiEHEpaSEKdsH0tew=
 github.com/samber/lo v1.49.1/go.mod h1:dO6KHFzUKXgP8LDhU0oI8d2hekjXnGOu0DB8Jecxd6o=
@@ -591,8 +593,8 @@ golang.org/x/oauth2 v0.0.0-20191202225959-858c2ad4c8b6/go.mod h1:gOpvHmFTYa4Iltr
 golang.org/x/oauth2 v0.0.0-20200107190931-bf48bf16ab8d/go.mod h1:gOpvHmFTYa4IltrdGE7lF6nIHvwfUNPOp7c8zoXwtLw=
 golang.org/x/oauth2 v0.0.0-20210514164344-f6687ab2804c/go.mod h1:KelEdhl1UZF7XfJ4dDtk6s++YSgaE7mD/BuKKDLBl4A=
 golang.org/x/oauth2 v0.0.0-20220223155221-ee480838109b/go.mod h1:DAh4E804XQdzx2j+YRIaUnCqCV2RuMz24cGBJ5QYIrc=
-golang.org/x/oauth2 v0.22.0 h1:BzDx2FehcG7jJwgWLELCdmLuxk2i+x9UDpSiss2u0ZA=
-golang.org/x/oauth2 v0.22.0/go.mod h1:XYTD2NtWslqkgxebSiOHnXEap4TF09sJSc7H1sXbhtI=
+golang.org/x/oauth2 v0.24.0 h1:KTBBxWqUa0ykRPLtV69rRto9TLXcqYkeswu48x/gvNE=
+golang.org/x/oauth2 v0.24.0/go.mod h1:XYTD2NtWslqkgxebSiOHnXEap4TF09sJSc7H1sXbhtI=
 golang.org/x/sync v0.0.0-20180314180146-1d60e4601c6f/go.mod h1:RxMgew5VJxzue5/jJTE5uejpjVlOe/izrB70Jof72aM=
 golang.org/x/sync v0.0.0-20181108010431-42b317875d0f/go.mod h1:RxMgew5VJxzue5/jJTE5uejpjVlOe/izrB70Jof72aM=
 golang.org/x/sync v0.0.0-20181221193216-37e7f081c4d4/go.mod h1:RxMgew5VJxzue5/jJTE5uejpjVlOe/izrB70Jof72aM=
@@ -788,10 +790,10 @@ google.golang.org/genproto v0.0.0-20200618031413-b414f8b61790/go.mod h1:jDfRM7Fc
 google.golang.org/genproto v0.0.0-20200729003335-053ba62fc06f/go.mod h1:FWY/as6DDZQgahTzZj3fqbO1CbirC29ZNUFHwi0/+no=
 google.golang.org/genproto v0.0.0-20200804131852-c06518451d9c/go.mod h1:FWY/as6DDZQgahTzZj3fqbO1CbirC29ZNUFHwi0/+no=
 google.golang.org/genproto v0.0.0-20200825200019-8632dd797987/go.mod h1:FWY/as6DDZQgahTzZj3fqbO1CbirC29ZNUFHwi0/+no=
-google.golang.org/genproto/googleapis/api v0.0.0-20240808171019-573a1156607a h1:KyUe15n7B1YCu+kMmPtlXxgkLQbp+Dw0tCRZf9Sd+CE=
-google.golang.org/genproto/googleapis/api v0.0.0-20240808171019-573a1156607a/go.mod h1:4+X6GvPs+25wZKbQq9qyAXrwIRExv7w0Ea6MgZLZiDM=
-google.golang.org/genproto/googleapis/rpc v0.0.0-20240808171019-573a1156607a h1:EKiZZXueP9/T68B8Nl0GAx9cjbQnCId0yP3qPMgaaHs=
-google.golang.org/genproto/googleapis/rpc v0.0.0-20240808171019-573a1156607a/go.mod h1:Ue6ibwXGpU+dqIcODieyLOcgj7z8+IcskoNIgZxtrFY=
+google.golang.org/genproto/googleapis/api v0.0.0-20241118233622-e639e219e697 h1:pgr/4QbFyktUv9CtQ/Fq4gzEE6/Xs7iCXbktaGzLHbQ=
+google.golang.org/genproto/googleapis/api v0.0.0-20241118233622-e639e219e697/go.mod h1:+D9ySVjN8nY8YCVjc5O7PZDIdZporIDY3KaGfJunh88=
+google.golang.org/genproto/googleapis/rpc v0.0.0-20241118233622-e639e219e697 h1:LWZqQOEjDyONlF1H6afSWpAL/znlREo2tHfLoe+8LMA=
+google.golang.org/genproto/googleapis/rpc v0.0.0-20241118233622-e639e219e697/go.mod h1:5uTbfoYQed2U9p3KIj2/Zzm02PYhndfdmML0qC3q3FU=
 google.golang.org/grpc v1.19.0/go.mod h1:mqu4LbDTu4XGKhr4mRzUsmM4RtVoemTSY81AxZiDr8c=
 google.golang.org/grpc v1.20.1/go.mod h1:10oTOabMzJvdu6/UiuZezV6QK5dSlG84ov/aaiqXj38=
 google.golang.org/grpc v1.21.1/go.mod h1:oYelfM1adQP15Ek0mdvEgi9Df8B9CZIaU1084ijfRaM=
@@ -805,8 +807,8 @@ google.golang.org/grpc v1.29.1/go.mod h1:itym6AZVZYACWQqET3MqgPpjcuV5QH3BxFS3Iji
 google.golang.org/grpc v1.30.0/go.mod h1:N36X2cJ7JwdamYAgDz+s+rVMFjt3numwzf/HckM8pak=
 google.golang.org/grpc v1.31.0/go.mod h1:N36X2cJ7JwdamYAgDz+s+rVMFjt3numwzf/HckM8pak=
 google.golang.org/grpc v1.33.2/go.mod h1:JMHMWHQWaTccqQQlmk3MJZS+GWXOdAesneDmEnv2fbc=
-google.golang.org/grpc v1.65.0 h1:bs/cUb4lp1G5iImFFd3u5ixQzweKizoZJAwBNLR42lc=
-google.golang.org/grpc v1.65.0/go.mod h1:WgYC2ypjlB0EiQi6wdKixMqukr6lBc0Vo+oOgjrM5ZQ=
+google.golang.org/grpc v1.68.0 h1:aHQeeJbo8zAkAa3pRzrVjZlbz6uSfeOXlJNQM0RAbz0=
+google.golang.org/grpc v1.68.0/go.mod h1:fmSPC5AsjSBCK54MyHRx48kpOti1/jRfOlwEWywNjWA=
 google.golang.org/protobuf v0.0.0-20200109180630-ec00e32a8dfd/go.mod h1:DFci5gLYBciE7Vtevhsrf46CRTquxDuWsQurQQe4oz8=
 google.golang.org/protobuf v0.0.0-20200221191635-4d8936d0db64/go.mod h1:kwYJMbMJ01Woi6D6+Kah6886xMZcty6N08ah7+eCXa0=
 google.golang.org/protobuf v0.0.0-20200228230310-ab0ca4ff8a60/go.mod h1:cfTl7dwQJ+fmap5saPgwCLgHXTUD7jkjRqWcaiX5VyM=

pkg/providers/imagefamily/bootstrap/aksbootstrap.go

@@ -454,6 +454,7 @@ func (a AKS) applyOptions(nbv *NodeBootstrapVariables) {
 	nbv.UserAssignedIdentityID = a.KubeletIdentityClientID
 
 	nbv.NetworkPlugin = a.NetworkPlugin
+
 	nbv.NetworkPolicy = a.NetworkPolicy
 	nbv.KubernetesVersion = a.KubernetesVersion
 

pkg/providers/imagefamily/customscriptsbootstrap/provisionclientbootstrap.go

@@ -20,10 +20,13 @@ import (
 	"context"
 	"encoding/base64"
 	"fmt"
+	"log/slog"
 	"math"
+	"os"
 	"strings"
 	"time"
 
+	"github.com/Azure/aks-middleware/http/client/direct/restlogger"
 	"github.com/Azure/azure-sdk-for-go/sdk/azcore/to"
 	"github.com/Azure/karpenter-provider-azure/pkg/apis/v1alpha2"
 	"github.com/Azure/karpenter-provider-azure/pkg/operator/options"
@@ -166,6 +169,11 @@ func (p ProvisionClientBootstrap) GetCustomDataAndCSE(ctx context.Context) (stri
 
 func (p *ProvisionClientBootstrap) getNodeBootstrappingFromClient(ctx context.Context, provisionProfile *models.ProvisionProfile, provisionHelperValues *models.ProvisionHelperValues, bootstrapToken string) (string, string, error) {
 	transport := httptransport.New(options.FromContext(ctx).NodeBootstrappingServerURL, "/", []string{"http"})
+
+	logger := slog.New(slog.NewJSONHandler(os.Stdout, nil))
+	loggingClient := restlogger.NewLoggingClient(logger)
+	transport.Transport = loggingClient.Transport
+
 	client := client.New(transport, strfmt.Default)
 
 	params := operations.NewNodeBootstrappingGetParams()
@@ -183,7 +191,7 @@ func (p *ProvisionClientBootstrap) getNodeBootstrappingFromClient(ctx context.Co
 
 	resp, err := client.Operations.NodeBootstrappingGet(params)
 	if err != nil {
-		// As of now we just fail the provisioning given the unlikely scenario of retriable error, but could be revisted along with retriable status on the server side.
+		// As of now we just fail the provisioning given the unlikely scenario of retriable error, but could be revisited along with retriable status on the server side.
 		return "", "", err
 	}
 
@@ -239,7 +247,7 @@ func normalizeResourceGroupNameForLabel(resourceGroupName string) string {
 }
 
 func reverseVMMemoryOverhead(vmMemoryOverheadPercent float64, adjustedMemory float64) float64 {
-	// This is not the best way to do it... But will be refactored later, given that retreiving the original memory properly might involves some restructure.
+	// This is not the best way to do it... But will be refactored later, given that retrieving the original memory properly might involves some restructure.
 	// Due to the fact that it is abstracted behind the cloudprovider interface.
 	return adjustedMemory / (1 - vmMemoryOverheadPercent)
 }

pkg/providers/instancetype/suite_test.go

@@ -163,6 +163,7 @@ var _ = Describe("InstanceType Provider", func() {
 				ContainSubstring("kubernetes.azure.com/network-subnet=karpentersub"),
 				ContainSubstring("kubernetes.azure.com/nodenetwork-vnetguid=test-vnet-guid"),
 				ContainSubstring("kubernetes.azure.com/podnetwork-type=overlay"),
+				ContainSubstring("kubernetes.azure.com/azure-cni-overlay=true"),
 			))
 		})
 		It("should use the subnet specified in the nodeclass", func() {
@@ -1222,6 +1223,57 @@ var _ = Describe("InstanceType Provider", func() {
 			Expect(kubeletFlags).To(ContainSubstring("--register-with-taints=" + karpv1.UnregisteredNoExecuteTaint.ToString()))
 		})
 	})
+
+	DescribeTable("Azure CNI node labels and agentbaker network plugin", func(
+		networkPlugin, networkPluginMode, networkDataplane, expectedAgentBakerNetPlugin string,
+		expectedNodeLabels sets.Set[string]) {
+		options := test.Options(test.OptionsFields{
+			NetworkPlugin:     lo.ToPtr(networkPlugin),
+			NetworkPluginMode: lo.ToPtr(networkPluginMode),
+			NetworkDataplane:  lo.ToPtr(networkDataplane),
+		})
+		ctx = options.ToContext(ctx)
+
+		ExpectApplied(ctx, env.Client, nodePool, nodeClass)
+		pod := coretest.UnschedulablePod()
+		ExpectProvisioned(ctx, env.Client, cluster, cloudProvider, coreProvisioner, pod)
+		ExpectScheduled(ctx, env.Client, pod)
+		customData := ExpectDecodedCustomData(azureEnv)
+
+		Expect(customData).To(ContainSubstring(fmt.Sprintf("NETWORK_PLUGIN=%s", expectedAgentBakerNetPlugin)))
+
+		for label := range expectedNodeLabels {
+			Expect(customData).To(ContainSubstring(label))
+		}
+	},
+		Entry("Azure CNI V1",
+			"azure", "", "",
+			"azure", sets.New[string]()),
+		Entry("Azure CNI w Overlay",
+			"azure", "overlay", "",
+			"none",
+			sets.New(
+				"kubernetes.azure.com/azure-cni-overlay=true",
+				"kubernetes.azure.com/network-subnet=karpentersub",
+				"kubernetes.azure.com/nodenetwork-vnetguid=test-vnet-guid",
+				"kubernetes.azure.com/podnetwork-type=overlay",
+			)),
+		Entry("Azure CNI w Overlay w Cilium",
+			"azure", "overlay", "cilium",
+			"none",
+			sets.New(
+				"kubernetes.azure.com/azure-cni-overlay=true",
+				"kubernetes.azure.com/network-subnet=karpentersub",
+				"kubernetes.azure.com/nodenetwork-vnetguid=test-vnet-guid",
+				"kubernetes.azure.com/podnetwork-type=overlay",
+				"kubernetes.azure.com/ebpf-dataplane=cilium",
+			)),
+		Entry("Cilium w feature flag Microsoft.ContainerService/EnableCiliumNodeSubnet",
+			"azure", "", "cilium",
+			"none",
+			sets.New("kubernetes.azure.com/ebpf-dataplane=cilium")),
+	)
+
 	Context("LoadBalancer", func() {
 		resourceGroup := "test-resourceGroup"
 
@@ -1352,6 +1404,5 @@ func createSDKErrorBody(code, message string) io.ReadCloser {
 
 func ExpectKubeletFlagsPassed(customData string) string {
 	GinkgoHelper()
-
 	return customData[strings.Index(customData, "KUBELET_FLAGS=")+len("KUBELET_FLAGS=") : strings.Index(customData, "KUBELET_NODE_LABELS")]
 }

pkg/providers/launchtemplate/launchtemplate.go

@@ -18,6 +18,7 @@ package launchtemplate
 
 import (
 	"context"
+	"strconv"
 	"strings"
 
 	"github.com/Azure/go-autorest/autorest/to"
@@ -38,10 +39,11 @@ import (
 const (
 	karpenterManagedTagKey = "karpenter.azure.com/cluster"
 
-	vnetDataPlaneLabel      = "kubernetes.azure.com/ebpf-dataplane"
-	vnetSubnetNameLabel     = "kubernetes.azure.com/network-subnet"
-	vnetGUIDLabel           = "kubernetes.azure.com/nodenetwork-vnetguid"
-	vnetPodNetworkTypeLabel = "kubernetes.azure.com/podnetwork-type"
+	dataplaneLabel       = "kubernetes.azure.com/ebpf-dataplane"
+	azureCNIOverlayLabel = "kubernetes.azure.com/azure-cni-overlay"
+	subnetNameLabel      = "kubernetes.azure.com/network-subnet"
+	vnetGUIDLabel        = "kubernetes.azure.com/nodenetwork-vnetguid"
+	podNetworkTypeLabel  = "kubernetes.azure.com/podnetwork-type"
 )
 
 type Template struct {
@@ -123,7 +125,7 @@ func (p *Provider) getStaticParameters(ctx context.Context, instanceType *cloudp
 
 	subnetID := lo.Ternary(nodeClass.Spec.VNETSubnetID != nil, lo.FromPtr(nodeClass.Spec.VNETSubnetID), options.FromContext(ctx).SubnetID)
 
-	if options.FromContext(ctx).NetworkPlugin == consts.NetworkPluginAzure && options.FromContext(ctx).NetworkPluginMode == consts.NetworkPluginModeOverlay {
+	if isAzureCNIOverlay(ctx) {
 		// TODO: make conditional on pod subnet
 		vnetLabels, err := p.getVnetInfoLabels(subnetID)
 		if err != nil {
@@ -140,7 +142,7 @@ func (p *Provider) getStaticParameters(ctx context.Context, instanceType *cloudp
 		//            values:
 		//              - cilium
 
-		labels[vnetDataPlaneLabel] = consts.NetworkDataplaneCilium
+		labels[dataplaneLabel] = consts.NetworkDataplaneCilium
 	}
 
 	return &parameters.StaticParameters{
@@ -162,13 +164,28 @@ func (p *Provider) getStaticParameters(ctx context.Context, instanceType *cloudp
 		ClusterID:                      options.FromContext(ctx).ClusterID,
 		APIServerName:                  options.FromContext(ctx).GetAPIServerName(),
 		KubeletClientTLSBootstrapToken: options.FromContext(ctx).KubeletClientTLSBootstrapToken,
-		NetworkPlugin:                  options.FromContext(ctx).NetworkPlugin,
+		NetworkPlugin:                  getAgentbakerNetworkPlugin(ctx),
 		NetworkPolicy:                  options.FromContext(ctx).NetworkPolicy,
 		SubnetID:                       subnetID,
 		ClusterResourceGroup:           p.clusterResourceGroup,
 	}, nil
 }
 
+func getAgentbakerNetworkPlugin(ctx context.Context) string {
+	if isAzureCNIOverlay(ctx) || isCiliumNodeSubnet(ctx) {
+		return consts.NetworkPluginNone
+	}
+	return consts.NetworkPluginAzure
+}
+
+func isCiliumNodeSubnet(ctx context.Context) bool {
+	return options.FromContext(ctx).NetworkPlugin == consts.NetworkPluginAzure && options.FromContext(ctx).NetworkPluginMode == consts.NetworkPluginModeNone && options.FromContext(ctx).NetworkDataplane == consts.NetworkDataplaneCilium
+}
+
+func isAzureCNIOverlay(ctx context.Context) bool {
+	return options.FromContext(ctx).NetworkPlugin == consts.NetworkPluginAzure && options.FromContext(ctx).NetworkPluginMode == consts.NetworkPluginModeOverlay
+}
+
 func (p *Provider) createLaunchTemplate(ctx context.Context, params *parameters.Parameters) (*Template, error) {
 	// merge and convert to ARM tags
 	azureTags := mergeTags(params.Tags, map[string]string{karpenterManagedTagKey: params.ClusterName})
@@ -213,9 +230,10 @@ func (p *Provider) getVnetInfoLabels(subnetID string) (map[string]string, error)
 		return nil, err
 	}
 	vnetLabels := map[string]string{
-		vnetSubnetNameLabel:     vnetSubnetComponents.SubnetName,
-		vnetGUIDLabel:           p.vnetGUID,
-		vnetPodNetworkTypeLabel: consts.NetworkPluginModeOverlay,
+		subnetNameLabel:      vnetSubnetComponents.SubnetName,
+		vnetGUIDLabel:        p.vnetGUID,
+		azureCNIOverlayLabel: strconv.FormatBool(true),
+		podNetworkTypeLabel:  consts.NetworkPluginModeOverlay,
 	}
 	return vnetLabels, nil
 }

pkg/utils/opts/armopts.go

@@ -18,8 +18,12 @@ package opts
 
 import (
 	"net/http"
+	"os"
 	"time"
 
+	"log/slog"
+
+	shPolicy "github.com/Azure/aks-middleware/http/client/azuresdk/policy"
 	"github.com/Azure/azure-sdk-for-go/sdk/azcore/arm"
 	"github.com/Azure/azure-sdk-for-go/sdk/azcore/policy"
 	"github.com/Azure/karpenter-provider-azure/pkg/auth"
@@ -30,6 +34,9 @@ func DefaultArmOpts() *arm.ClientOptions {
 	opts.Telemetry = DefaultTelemetryOpts()
 	opts.Retry = DefaultRetryOpts()
 	opts.Transport = defaultHTTPClient
+
+	logger := slog.New(slog.NewJSONHandler(os.Stdout, nil))
+	opts.PerCallPolicies = append(opts.PerCallPolicies, shPolicy.NewLoggingPolicy(*logger))
 	return opts
 }