[Bug] Azure OpenAI Image Generation Fails with Managed Identity in LiteLLM v1.76.3

[shagunb-acn]

What happened?

Summary:
In LiteLLM v1.76.3, when using Azure OpenAI's image generation API (e.g., for models like DALL·E 3), the library bypasses the AzureOpenAI SDK and instead uses a direct HTTP client to make requests. This design prevents users from authenticating via Managed Identity, which is essential in secure enterprise environments that prohibit API key usage.

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Issue Details:

• LiteLLM uses raw HTTP requests for image generation instead of the AzureOpenAI SDK.
• There is no support for passing azure_ad_token_provider or azure_ad_token as a Bearer token in the HTTP request.
• This makes it impossible to use Azure OpenAI image generation with Managed Identity, effectively blocking secure, keyless deployments.

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Impact:

• ❌ Security Compliance Violation: Enterprises enforcing keyless access via Managed Identity cannot use LiteLLM for image generation.
• ⚠️ Feature Inconsistency: Text generation supports Managed Identity via SDK, but image generation does not.
• 🚫 Deployment Blocker: This is a critical blocker for organizations using Azure OpenAI in production environments.

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Suggested Fix:

• Use the AzureOpenAI SDK client for image generation requests, or
• Allow injection of azure_ad_token or azure_ad_token_provider into the HTTP request headers for authentication.

Relevant log output

Error Message: ERROR:LiteLLMAdapter:Exception occurred in image generation: APIError --> litellm.APIError: AzureException APIError - Header value must be str or bytes, not <class 'NoneType'>  

Generated CURL from LiteLLM 
POST Request Sent from LiteLLM:
curl -X POST \
https://xxxxxxxxxxxx.openai.azure.com/openai/deployments/dall-e-3/images/generations?api-version=2025-04-01-preview \
-H 'Content-Type: application/json' -H 'api-key: None' \
-d '{'model': 'dall-e-3', 'prompt': 'generate a small butterfly', 'extra_body': {}}'

Are you a ML Ops Team?

No

What LiteLLM version are you on ?

1.76.3

Twitter / LinkedIn details

https://www.linkedin.com/in/shagunbansal/