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Feature Request: Native Azure OIDC Support for HCP Terraform (Dynamic Credentials) #5544

@GHKhuddle1

Description

@GHKhuddle1

Use-cases

When provisioning Databricks account-level resources (like metastores) via HCP Terraform (Terraform Cloud), attempting to authenticate using Azure OIDC (Federated Identity Credentials) fails.

Currently, OIDC authentication is supported for GitHub Actions using auth_type = "github-oidc-azure". However, executing this within HCP Terraform runners throws the following error:

Error: cannot read metastore: failed during request visitor: github-oidc-azure auth: not configured.

Standard workarounds—such as using the azurerm provider to mint an AAD token via an external data source running az account get-access-token—are not viable because HCP Terraform runners do not have the Azure CLI installed natively.

This limitation currently forces us to fall back to using static azure_client_secret credentials.

Proposal

The databricks provider should natively support Azure OIDC authentication for HCP Terraform environments without relying on the Azure CLI or the github-oidc-azure auth type.

Ideally, the provider should automatically detect the ARM_OIDC_TOKEN, ARM_CLIENT_ID, and ARM_TENANT_ID environment variables that are natively injected by HCP Terraform's Dynamic Provider Credentials, functioning similarly to the azurerm provider's OIDC implementation.

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