diff --git a/servers/fastapi/api/v1/auth/router.py b/servers/fastapi/api/v1/auth/router.py
index 17b75dba..8f973d9c 100644
--- a/servers/fastapi/api/v1/auth/router.py
+++ b/servers/fastapi/api/v1/auth/router.py
@@ -49,16 +49,14 @@ async def setup_credentials(body: AuthCredentialsRequest, request: Request):
     except ValueError as exc:
         raise HTTPException(status_code=400, detail=str(exc)) from exc
 
-    token = create_session_token(body.username.strip())
-    response = JSONResponse(
+    username = body.username.strip()
+    return JSONResponse(
         {
             "configured": True,
-            "authenticated": True,
-            "username": body.username.strip(),
+            "authenticated": False,
+            "username": username,
         }
     )
-    set_session_cookie(response, token, request)
-    return response
 
 
 @API_V1_AUTH_ROUTER.post("/login")
diff --git a/servers/nextjs/components/Auth/AuthGate.tsx b/servers/nextjs/components/Auth/AuthGate.tsx
index 88b880d2..be88741e 100644
--- a/servers/nextjs/components/Auth/AuthGate.tsx
+++ b/servers/nextjs/components/Auth/AuthGate.tsx
@@ -126,10 +126,25 @@ export default function AuthGate() {
         return;
       }
 
+      if (isSetupMode) {
+        setStatus({
+          configured: true,
+          authenticated: false,
+          username: (payload as AuthStatus).username ?? cleanedUsername,
+        });
+        setPassword("");
+        setConfirmPassword("");
+        toast.success("Account created", {
+          description: "Sign in with your new username and password to continue.",
+          duration: 6000,
+        });
+        return;
+      }
+
       setStatus({
-        configured: Boolean(payload.configured),
-        authenticated: Boolean(payload.authenticated),
-        username: payload.username ?? cleanedUsername,
+        configured: Boolean((payload as AuthStatus).configured),
+        authenticated: Boolean((payload as AuthStatus).authenticated),
+        username: (payload as AuthStatus).username ?? cleanedUsername,
       });
       setPassword("");
       setConfirmPassword("");
@@ -289,7 +304,7 @@ export default function AuthGate() {
                 ? "Saving credentials…"
                 : "Signing in…"
               : isSetupMode
-                ? "Create login and continue"
+                ? "Create account"
                 : "Sign in"}
           </button>
         </form>