diff --git a/projects/plugins/jetpack/changelog/update-featured-image-upgrade-prompt-on-generating b/projects/plugins/jetpack/changelog/update-featured-image-upgrade-prompt-on-generating
new file mode 100644
index 0000000000000..6471d445f2279
--- /dev/null
+++ b/projects/plugins/jetpack/changelog/update-featured-image-upgrade-prompt-on-generating
@@ -0,0 +1,4 @@
+Significance: minor
+Type: other
+
+Avoid showing featured image upgrade prompt on generating
diff --git a/projects/plugins/jetpack/extensions/plugins/ai-assistant-plugin/components/featured-image/index.tsx b/projects/plugins/jetpack/extensions/plugins/ai-assistant-plugin/components/featured-image/index.tsx
index dbef7f093525e..2e2014dbdb134 100644
--- a/projects/plugins/jetpack/extensions/plugins/ai-assistant-plugin/components/featured-image/index.tsx
+++ b/projects/plugins/jetpack/extensions/plugins/ai-assistant-plugin/components/featured-image/index.tsx
@@ -253,7 +253,7 @@ export default function FeaturedImage( { busy, disabled }: { busy: boolean; disa
 				<AiAssistantModal handleClose={ toggleFeaturedImageModal } title={ modalTitle }>
 					<div className="ai-assistant-featured-image__content">
 						<div className="ai-assistant-featured-image__image-canvas">
-							{ ( requireUpgrade || notEnoughRequests ) && (
+							{ ( requireUpgrade || notEnoughRequests ) && ! currentPointer?.generating && (
 								<UpgradePrompt
 									description={
 										notEnoughRequests