diff --git a/src/basic_memory/cli/commands/telemetry.py b/src/basic_memory/cli/commands/telemetry.py
index 634a7008..b7701075 100644
--- a/src/basic_memory/cli/commands/telemetry.py
+++ b/src/basic_memory/cli/commands/telemetry.py
@@ -49,7 +49,9 @@ def status() -> None:
 
     config = ConfigManager().config
 
-    status_text = "[green]enabled[/green]" if config.telemetry_enabled else "[yellow]disabled[/yellow]"
+    status_text = (
+        "[green]enabled[/green]" if config.telemetry_enabled else "[yellow]disabled[/yellow]"
+    )
 
     console.print(f"\nTelemetry: {status_text}")
     console.print(f"Install ID: [dim]{get_install_id()}[/dim]")
diff --git a/src/basic_memory/services/initialization.py b/src/basic_memory/services/initialization.py
index 6152161a..670912d5 100644
--- a/src/basic_memory/services/initialization.py
+++ b/src/basic_memory/services/initialization.py
@@ -162,6 +162,11 @@ async def initialize_app(
     Args:
         app_config: The Basic Memory project configuration
     """
+    # Skip initialization in cloud mode - cloud manages its own projects
+    if app_config.cloud_mode_enabled:
+        logger.debug("Skipping initialization in cloud mode - projects managed by cloud")
+        return
+
     logger.info("Initializing app...")
     # Initialize database first
     await initialize_database(app_config)