diff --git a/app/api/dependencies.py b/app/api/dependencies.py
index bb6b308..abf03d6 100644
--- a/app/api/dependencies.py
+++ b/app/api/dependencies.py
@@ -13,7 +13,6 @@
 from fastapi.security import APIKeyHeader, OAuth2PasswordBearer
 from jose import JWTError, jwt
 from sqlalchemy import select
-from sqlalchemy.exc import IntegrityError
 from sqlalchemy.ext.asyncio import AsyncSession
 from sqlalchemy.orm import Session, joinedload, selectinload
 
@@ -33,7 +32,6 @@
 )
 from app.models.forge_api_key import ForgeApiKey
 from app.models.user import User
-from app.services.provider_service import create_default_tensorblock_provider_for_user
 
 logger = get_logger(name="dependencies")
 
@@ -402,111 +400,11 @@ async def get_current_user_from_clerk(
         .filter(User.clerk_user_id == clerk_user_id)
     )
     user = result.scalar_one_or_none()
-
-    # User doesn't exist yet, create one
     if not user:
-        # Fetch user data from Clerk API
-        # https://clerk.com/docs/reference/backend-api/tag/users/get/users/%7Buser_id%7D
-        if not CLERK_API_KEY:
-            raise HTTPException(
-                status_code=status.HTTP_500_INTERNAL_SERVER_ERROR,
-                detail="Clerk API key not configured",
-            )
-
-        # Call Clerk API to get user info
-        url = f"{CLERK_API_URL}/users/{clerk_user_id}"
-
-        try:
-            async with aiohttp.ClientSession() as session:
-                async with session.get(url, headers={"Authorization": f"Bearer {CLERK_API_KEY}"}) as response:
-                    response.raise_for_status()
-                    user_data = await response.json()
-
-            # Extract email address
-            email = None
-            if user_data.get("primary_email_address_id") and user_data.get(
-                "email_addresses"
-            ):
-                for email_obj in user_data.get("email_addresses", []):
-                    if email_obj["id"] == user_data["primary_email_address_id"]:
-                        email = email_obj.get("email_address")
-                        break
-            if email is None:
-                raise ValueError("No email found in Clerk user data")
-
-            # Use email as username directly
-            username = email
-        except Exception as e:
-            logger.exception(f"Error fetching Clerk user data: {e}")
-            raise HTTPException(
-                status_code=status.HTTP_500_INTERNAL_SERVER_ERROR,
-                detail="Failed to fetch user data from Clerk",
-            )
-
-        # Check if user exists with this email
-        result = await db.execute(select(User).filter(User.email == email))
-        existing_user = result.scalar_one_or_none()
-        if existing_user:
-            # Link existing user to Clerk ID
-            try:
-                existing_user.clerk_user_id = clerk_user_id
-                await db.commit()
-                return existing_user
-            except IntegrityError:
-                # Another request might have already linked this user or created a new one
-                await db.rollback()
-                # Retry the query to get the user
-                result = await db.execute(
-                    select(User).filter(User.clerk_user_id == clerk_user_id)
-                )
-                user = result.scalar_one_or_none()
-                if user:
-                    return user
-                # If still no user, continue with creation attempt
-
-        # Create new user
-        try:
-            user = User(
-                email=email,
-                username=username,
-                clerk_user_id=clerk_user_id,
-                is_active=True,
-                hashed_password="",  # Clerk handles authentication
-            )
-            db.add(user)
-            await db.commit()
-            await db.refresh(user)
-
-            # Create default TensorBlock provider for the new user
-            try:
-                await create_default_tensorblock_provider_for_user(user.id, db)
-            except Exception as e:
-                # Log error but don't fail user creation
-                logger.warning(
-                    f"Failed to create default TensorBlock provider for user {user.id}: {e}"
-                )
-
-            return user
-        except IntegrityError as e:
-            # Handle race condition: another request might have created the user
-            await db.rollback()
-            if "users_clerk_user_id_key" in str(e) or "clerk_user_id" in str(e):
-                # Retry the query to get the user that was created by another request
-                result = await db.execute(
-                    select(User).filter(User.clerk_user_id == clerk_user_id)
-                )
-                user = result.scalar_one_or_none()
-                if user:
-                    return user
-                else:
-                    # This shouldn't happen, but handle it gracefully
-                    raise HTTPException(
-                        status_code=status.HTTP_500_INTERNAL_SERVER_ERROR,
-                        detail="Failed to create or retrieve user due to database constraint",
-                    )
-            else:
-                # Re-raise other integrity errors
-                raise
+        raise HTTPException(
+            status_code=status.HTTP_401_UNAUTHORIZED,
+            detail="User not found",
+        )
 
     return user
 
diff --git a/app/api/routes/users.py b/app/api/routes/users.py
index 8ae56cb..887a9f6 100644
--- a/app/api/routes/users.py
+++ b/app/api/routes/users.py
@@ -22,7 +22,10 @@ async def create_user(
     user_in: UserCreate, db: AsyncSession = Depends(get_async_db)
 ) -> Any:
     """
-    Create a new user.
+    Create a new user for cli usage.
+
+    This is a deprecated endpoint and should not be used in staging/production.
+    Users should be created via the Clerk webhook.
     """
     # Check if email already exists
     result = await db.execute(
@@ -52,7 +55,6 @@ async def create_user(
         hashed_password=hashed_password,
     )
     db.add(db_user)
-    await db.commit()
     await db.refresh(db_user)
 
     # Create default TensorBlock provider for the new user
@@ -66,7 +68,7 @@ async def create_user(
                 "error": str(e),
             }
         })
-
+    await db.commit()
     return db_user
 
 
diff --git a/app/api/routes/webhooks.py b/app/api/routes/webhooks.py
index 6cd7068..ee792e9 100644
--- a/app/api/routes/webhooks.py
+++ b/app/api/routes/webhooks.py
@@ -3,6 +3,7 @@
 
 from fastapi import APIRouter, Depends, HTTPException, Request, status
 import stripe
+from sqlalchemy.exc import IntegrityError
 from sqlalchemy import update, delete, select
 from sqlalchemy.ext.asyncio import AsyncSession
 from svix import Webhook, WebhookVerificationError
@@ -14,6 +15,7 @@
 from app.models.user import User
 from app.models.admin_users import AdminUsers
 from app.services.wallet_service import WalletService
+from app.services.provider_service import create_default_tensorblock_provider_for_user
 
 logger = get_logger(name="webhooks")
 
@@ -27,12 +29,17 @@
 @router.post("/clerk")
 async def clerk_webhook_handler(request: Request, db: AsyncSession = Depends(get_async_db)):
     """
-    Handle Clerk webhooks for user events.
+    Handle Clerk webhooks for user/organization membership events.
 
     Key events to handle:
+    # Organization membership events
     - organizationMembership.created: Add user to admin users table
     - organizationMembership.updated: Update user in admin users table
     - organizationMembership.deleted: Remove user from admin users table
+
+    # User events
+    - user.created: Upsert user record
+    - user.updated: Upsert user record
     """
     # Get the request body
     payload = await request.body()
@@ -71,10 +78,12 @@ async def clerk_webhook_handler(request: Request, db: AsyncSession = Depends(get
         event_type = event_data.get("type")
         logger.info(f"Received Clerk webhook: {event_type}")
 
-        if event_type == "organizationMembership.created" or event_type == "organizationMembership.updated":
+        if event_type in ["organizationMembership.created", "organizationMembership.updated"]:
             await handle_organization_membership_created(event_data, db)
         elif event_type == "organizationMembership.deleted":
             await handle_organization_membership_deleted(event_data, db)
+        elif event_type in ["user.created", "user.updated"]:
+            await handle_clerk_user_created(event_data, db)
         else:
             logger.warning(f"Unhandled Clerk event type: {event_type}")
     except json.JSONDecodeError:
@@ -122,6 +131,55 @@ async def handle_organization_membership_deleted(event_data: dict, db: AsyncSess
     await db.commit()
 
 
+async def handle_clerk_user_created(event_data: dict, db: AsyncSession):
+    data = event_data['data']
+    clerk_user_id = data['id']
+
+    # extract the primary email address
+    if not data.get('primary_email_address_id') or not data.get('email_addresses'):
+        logger.error(f"No primary email address or email addresses found for user {clerk_user_id}")
+        raise HTTPException(status_code=400, detail="No primary email address or email addresses found for user")
+    
+    email = None
+    primary_email_address_id = data['primary_email_address_id']
+    for email_address in data['email_addresses']:
+        if email_address['id'] == primary_email_address_id:
+            email = email_address['email_address']
+            break
+    
+    if not email:
+        logger.error(f"No email address found for user {clerk_user_id}")
+        raise HTTPException(status_code=400, detail="No email address found for user")
+    
+    # upsert user record
+    try:
+        result = await db.execute(
+            insert(User).values(
+                email=email,
+                username=email,  # Use email as username
+                clerk_user_id=clerk_user_id,
+                is_active=True,
+                hashed_password="",  # Clerk handles authentication
+            ).on_conflict_do_update(
+                index_elements=[User.clerk_user_id],
+                set_=dict(
+                    email=email,
+                    username=email,
+                    is_active=True,
+                    hashed_password="",  # Clerk handles authentication
+                )
+            ).returning(User.id)
+        )
+        user_id = result.scalar_one()
+        await create_default_tensorblock_provider_for_user(user_id, db)
+        await db.commit()
+    except IntegrityError:
+        logger.exception("Error upserting user record for clerk user")
+        raise HTTPException(status_code=400, detail="Error upserting user record for clerk user")
+    
+    logger.info(f"Upserted user record for clerk user {clerk_user_id}/{email}")
+
+
 @router.post("/stripe")
 async def stripe_webhook_handler(request: Request, db: AsyncSession = Depends(get_async_db)):
     """
diff --git a/app/services/provider_service.py b/app/services/provider_service.py
index 7c9e763..ff2446e 100644
--- a/app/services/provider_service.py
+++ b/app/services/provider_service.py
@@ -859,15 +859,7 @@ async def create_default_tensorblock_provider_for_user(
         )
 
         db.add(provider_key)
-        await db.commit()
-
         logger.info(f"Created default TensorBlock provider for user {user_id}")
-
-    except Exception as e:
-        await db.rollback()
-        logger.error(
-            "Error creating default TensorBlock provider for user {}: {}",
-            user_id,
-            e,
-        )
-        # Don't raise the exception - this is optional functionality
+    except Exception:
+        logger.exception(f"Error creating default TensorBlock provider for user {user_id}")
+        raise