diff --git a/acceptance/bundle/deploy/empty-bundle/out.test.toml b/acceptance/bundle/deploy/empty-bundle/out.test.toml
index 01ed6822af..0940cf4b56 100644
--- a/acceptance/bundle/deploy/empty-bundle/out.test.toml
+++ b/acceptance/bundle/deploy/empty-bundle/out.test.toml
@@ -2,4 +2,5 @@ Local = true
 Cloud = true
 
 [EnvMatrix]
+  DATABRICKS_BUNDLE_ENABLE_EXPERIMENTAL_YAML_SYNC = ["", "true"]
   DATABRICKS_BUNDLE_ENGINE = ["terraform", "direct"]
diff --git a/acceptance/bundle/deploy/empty-bundle/test.toml b/acceptance/bundle/deploy/empty-bundle/test.toml
index 5265ac0b23..f64800a163 100644
--- a/acceptance/bundle/deploy/empty-bundle/test.toml
+++ b/acceptance/bundle/deploy/empty-bundle/test.toml
@@ -1 +1,4 @@
-Cloud=true
+Cloud = true
+
+[EnvMatrix]
+DATABRICKS_BUNDLE_ENABLE_EXPERIMENTAL_YAML_SYNC = ["", "true"]
diff --git a/bundle/statemgmt/upload_state_for_yaml_sync.go b/bundle/statemgmt/upload_state_for_yaml_sync.go
index 7d7c766743..c3da05727c 100644
--- a/bundle/statemgmt/upload_state_for_yaml_sync.go
+++ b/bundle/statemgmt/upload_state_for_yaml_sync.go
@@ -54,18 +54,23 @@ func (m *uploadStateForYamlSync) Apply(ctx context.Context, b *bundle.Bundle) di
 
 	_, snapshotPath := b.StateFilenameConfigSnapshot(ctx)
 
-	diags := m.convertState(ctx, b, snapshotPath)
-	if diags.HasError() {
-		return diags
+	created, err := m.convertState(ctx, b, snapshotPath)
+	if err != nil {
+		log.Warnf(ctx, "Failed to create config snapshot: %v", err)
+		return nil
+	}
+	if !created {
+		return nil
 	}
 
-	err := uploadState(ctx, b)
+	err = uploadState(ctx, b)
 	if err != nil {
-		return diags.Extend(diag.Warningf("Failed to upload config snapshot to workspace: %v", err))
+		log.Warnf(ctx, "Failed to upload config snapshot: %v", err)
+		return nil
 	}
 
 	log.Infof(ctx, "Config snapshot created at %s", snapshotPath)
-	return diags
+	return nil
 }
 
 func uploadState(ctx context.Context, b *bundle.Bundle) error {
@@ -92,10 +97,22 @@ func uploadState(ctx context.Context, b *bundle.Bundle) error {
 	return nil
 }
 
-func (m *uploadStateForYamlSync) convertState(ctx context.Context, b *bundle.Bundle, snapshotPath string) (diags diag.Diagnostics) {
+func (m *uploadStateForYamlSync) convertState(ctx context.Context, b *bundle.Bundle, snapshotPath string) (bool, error) {
 	terraformResources, err := terraform.ParseResourcesState(ctx, b)
 	if err != nil {
-		return diag.FromErr(err)
+		return false, fmt.Errorf("failed to parse terraform state: %w", err)
+	}
+
+	// ParseResourcesState returns nil when the terraform state file doesn't exist
+	// (e.g. first deploy with no resources).
+	if terraformResources == nil {
+		return false, nil
+	}
+
+	_, localTerraformPath := b.StateFilenameTerraform(ctx)
+	data, err := os.ReadFile(localTerraformPath)
+	if err != nil {
+		return false, fmt.Errorf("failed to read terraform state: %w", err)
 	}
 
 	state := make(map[string]dstate.ResourceEntry)
@@ -111,18 +128,12 @@ func (m *uploadStateForYamlSync) convertState(ctx context.Context, b *bundle.Bun
 		}
 	}
 
-	_, localTerraformPath := b.StateFilenameTerraform(ctx)
-	data, err := os.ReadFile(localTerraformPath)
-	if err != nil {
-		return diag.FromErr(err)
-	}
-
 	var tfState struct {
 		Lineage string `json:"lineage"`
 		Serial  int    `json:"serial"`
 	}
 	if err := json.Unmarshal(data, &tfState); err != nil {
-		return diag.FromErr(err)
+		return false, err
 	}
 
 	migratedDB := dstate.NewDatabase(tfState.Lineage, tfState.Serial+1)
@@ -135,13 +146,13 @@ func (m *uploadStateForYamlSync) convertState(ctx context.Context, b *bundle.Bun
 		},
 	}
 
-	// Get the dynamic value from b.Config and reverse the interpolation
+	// Get the dynamic value from b.Config and reverse the interpolation.
 	// b.Config has been modified by terraform.Interpolate which converts bundle-style
-	// references (${resources.pipelines.x.id}) to terraform-style (${databricks_pipeline.x.id})
+	// references (${resources.pipelines.x.id}) to terraform-style (${databricks_pipeline.x.id}).
 	interpolatedRoot := b.Config.Value()
 	uninterpolatedRoot, err := reverseInterpolate(interpolatedRoot)
 	if err != nil {
-		return diag.FromErr(fmt.Errorf("failed to reverse interpolation: %w", err))
+		return false, fmt.Errorf("failed to reverse interpolation: %w", err)
 	}
 
 	var uninterpolatedConfig config.Root
@@ -149,12 +160,12 @@ func (m *uploadStateForYamlSync) convertState(ctx context.Context, b *bundle.Bun
 		return uninterpolatedRoot, nil
 	})
 	if err != nil {
-		return diag.FromErr(fmt.Errorf("failed to create uninterpolated config: %w", err))
+		return false, fmt.Errorf("failed to create uninterpolated config: %w", err)
 	}
 
 	plan, err := deploymentBundle.CalculatePlan(ctx, b.WorkspaceClient(), &uninterpolatedConfig, snapshotPath)
 	if err != nil {
-		return diag.FromErr(err)
+		return false, err
 	}
 
 	for _, entry := range plan.Plan {
@@ -172,13 +183,13 @@ func (m *uploadStateForYamlSync) convertState(ctx context.Context, b *bundle.Bun
 		}
 		err := structaccess.Set(sv.Value, structpath.NewStringKey(nil, "etag"), etag)
 		if err != nil {
-			diags = diags.Extend(diag.Warningf("Failed to set etag on %q: %v", key, err))
+			log.Warnf(ctx, "Failed to set etag on %q: %v", key, err)
 		}
 	}
 
 	deploymentBundle.Apply(ctx, b.WorkspaceClient(), plan, direct.MigrateMode(true))
 
-	return diags
+	return true, nil
 }
 
 // reverseInterpolate reverses the terraform.Interpolate transformation.