diff --git a/docs/en_US/release_notes_9_14.rst b/docs/en_US/release_notes_9_14.rst
index f841dcd5cd5..13512c4104e 100644
--- a/docs/en_US/release_notes_9_14.rst
+++ b/docs/en_US/release_notes_9_14.rst
@@ -30,4 +30,5 @@ Bug fixes
 
   | `Issue #9279 <https://github.com/pgadmin-org/pgadmin4/issues/9279>`_ -  Fixed an issue where OAuth2 authentication fails with 'object has no attribute' if OAUTH2_AUTO_CREATE_USER is False.
   | `Issue #9392 <https://github.com/pgadmin-org/pgadmin4/issues/9392>`_ -  Ensure that the Geometry Viewer refreshes when re-running queries or switching geometry columns, preventing stale data from being displayed.
+  | `Issue #9694 <https://github.com/pgadmin-org/pgadmin4/issues/9694>`_ -  Fixed an issue where AI Reports are grayed out after setting an API key by auto-selecting the default provider.
   | `Issue #9721 <https://github.com/pgadmin-org/pgadmin4/issues/9721>`_ -  Fixed an issue where permissions page is not completely accessible on full scroll.
diff --git a/web/pgadmin/preferences/__init__.py b/web/pgadmin/preferences/__init__.py
index 094578c8c53..13aa2532847 100644
--- a/web/pgadmin/preferences/__init__.py
+++ b/web/pgadmin/preferences/__init__.py
@@ -229,6 +229,18 @@ def save():
     """
     pref_data = get_data()
 
+    # Check once whether the user is explicitly setting default_provider
+    # in this save, so auto-selection doesn't override their choice.
+    _provider_map = {
+        'anthropic_api_key_file': 'anthropic',
+        'openai_api_key_file': 'openai',
+        'ollama_api_url': 'ollama',
+        'docker_api_url': 'docker',
+    }
+    explicit_provider_choice = any(
+        item.get('name') == 'default_provider' for item in pref_data
+    )
+
     for data in pref_data:
         if data['name'] in ['vw_edt_tab_title_placeholder',
                             'qt_tab_title_placeholder',
@@ -243,6 +255,16 @@ def save():
         if data['name'] == 'save_app_state' and not data['value']:
             delete_tool_data()
 
+        # Auto-select the default LLM provider when an API key/URL is
+        # configured and no provider has been selected yet.
+        if res and not explicit_provider_choice and \
+                data['name'] in _provider_map and data['value']:
+            ai_module = Preferences.module('ai')
+            if ai_module:
+                dp_pref = ai_module.preference('default_provider')
+                if dp_pref and not dp_pref.get():
+                    dp_pref.set(_provider_map[data['name']])
+
         if not res:
             return internal_server_error(errormsg=msg)
 
@@ -309,6 +331,18 @@ def update():
     pref_data = get_data()
     pref_data = json.loads(pref_data['pref_data'])
 
+    # Check once whether the user is explicitly setting default_provider
+    # in this save, so auto-selection doesn't override their choice.
+    _provider_map = {
+        'anthropic_api_key_file': 'anthropic',
+        'openai_api_key_file': 'openai',
+        'ollama_api_url': 'ollama',
+        'docker_api_url': 'docker',
+    }
+    explicit_provider_choice = any(
+        item.get('name') == 'default_provider' for item in pref_data
+    )
+
     for data in pref_data:
         if data['name'] in ['vw_edt_tab_title_placeholder',
                             'qt_tab_title_placeholder',
@@ -321,6 +355,16 @@ def update():
         # set user preferences
         pref.set(data['value'])
 
+        # Auto-select the default LLM provider when an API key/URL is
+        # configured and no provider has been selected yet.
+        if not explicit_provider_choice and \
+                data['name'] in _provider_map and data['value']:
+            ai_module = Preferences.module('ai')
+            if ai_module:
+                dp_pref = ai_module.preference('default_provider')
+                if dp_pref and not dp_pref.get():
+                    dp_pref.set(_provider_map[data['name']])
+
     return make_json_response(
         data={'data': 'Success'},
         status=200