diff --git a/plugins/woocommerce-admin/client/customize-store/index.tsx b/plugins/woocommerce-admin/client/customize-store/index.tsx
index 464ae2ee7eb..1b66af78a21 100644
--- a/plugins/woocommerce-admin/client/customize-store/index.tsx
+++ b/plugins/woocommerce-admin/client/customize-store/index.tsx
@@ -280,41 +280,8 @@ export const customizeStoreStateMachineDefinition = createMachine( {
 		},
 		intro: {
 			id: 'intro',
-			initial: 'flowType',
+			initial: 'fetchIntroData',
 			states: {
-				flowType: {
-					always: [
-						{
-							target: 'fetchIntroData',
-							cond: 'isNotWooExpress',
-							actions: 'assignNoAI',
-						},
-						{
-							target: 'checkAiStatus',
-							cond: 'isWooExpress',
-						},
-					],
-				},
-				checkAiStatus: {
-					initial: 'pending',
-					states: {
-						pending: {
-							invoke: {
-								src: 'fetchAiStatus',
-								onDone: {
-									actions: 'assignAiStatus',
-									target: 'success',
-								},
-								onError: {
-									actions: 'assignAiOffline',
-									target: 'success',
-								},
-							},
-						},
-						success: { type: 'final' },
-					},
-					onDone: 'fetchIntroData',
-				},
 				fetchIntroData: {
 					initial: 'pending',
 					states: {
@@ -450,31 +417,9 @@ export const customizeStoreStateMachineDefinition = createMachine( {
 						{
 							// Otherwise, proceed to the next step.
 							cond: 'activeThemeHasMods',
-							target: 'preCheckAiStatus',
-						},
-					],
-				},
-				preCheckAiStatus: {
-					always: [
-						{
-							cond: 'isWooExpress',
-							target: 'checkAiStatus',
-						},
-						{ cond: 'isNotWooExpress', target: 'assemblerHub' },
-					],
-				},
-				checkAiStatus: {
-					invoke: {
-						src: 'fetchAiStatus',
-						onDone: {
-							actions: 'assignAiStatus',
 							target: 'assemblerHub',
 						},
-						onError: {
-							actions: 'assignAiOffline',
-							target: 'assemblerHub',
-						},
-					},
+					],
 				},
 				assemblerHub: {
 					entry: [
@@ -542,36 +487,14 @@ export const customizeStoreStateMachineDefinition = createMachine( {
 					invoke: {
 						src: 'fetchSurveyCompletedOption',
 						onError: {
-							target: 'preCheckAiStatus', // leave it as initialised default on error
+							target: 'transitional', // leave it as initialised default on error
 						},
 						onDone: {
-							target: 'preCheckAiStatus',
+							target: 'transitional',
 							actions: [ 'assignHasCompleteSurvey' ],
 						},
 					},
 				},
-				preCheckAiStatus: {
-					always: [
-						{
-							cond: 'isWooExpress',
-							target: 'checkAiStatus',
-						},
-						{ cond: 'isNotWooExpress', target: 'transitional' },
-					],
-				},
-				checkAiStatus: {
-					invoke: {
-						src: 'fetchAiStatus',
-						onDone: {
-							actions: 'assignAiStatus',
-							target: 'transitional',
-						},
-						onError: {
-							actions: 'assignAiOffline',
-							target: 'transitional',
-						},
-					},
-				},
 				transitional: {
 					entry: [
 						{ type: 'updateQueryStep', step: 'transitional' },
@@ -640,8 +563,6 @@ export const CustomizeStoreController = ( {
 				isAiOffline: ( _ctx ) => {
 					return _ctx.flowType === FlowType.AIOffline;
 				},
-				isWooExpress: () => isWooExpress(),
-				isNotWooExpress: () => ! isWooExpress(),
 				activeThemeHasMods: ( _ctx ) => {
 					return !! _ctx.activeThemeHasMods;
 				},
diff --git a/plugins/woocommerce-admin/client/customize-store/intro/actions.ts b/plugins/woocommerce-admin/client/customize-store/intro/actions.ts
index cb5d1a0a5fd..c972d88382d 100644
--- a/plugins/woocommerce-admin/client/customize-store/intro/actions.ts
+++ b/plugins/woocommerce-admin/client/customize-store/intro/actions.ts
@@ -9,7 +9,6 @@ import { recordEvent } from '@woocommerce/tracks';
  */
 import { customizeStoreStateMachineEvents } from '..';
 import {
-	aiStatusResponse,
 	customizeStoreStateMachineContext,
 	FlowType,
 	RecommendThemesAPIResponse,
@@ -108,47 +107,6 @@ export const assignCurrentThemeIsAiGenerated = assign<
 	},
 } );
 
-export const assignAiStatus = assign<
-	customizeStoreStateMachineContext,
-	customizeStoreStateMachineEvents // this is actually the wrong type for the event but I still don't know how to type this properly
->( {
-	flowType: ( _context, _event ) => {
-		const indicator = ( _event as DoneInvokeEvent< aiStatusResponse > ).data
-			.status.indicator;
-		const status = indicator !== 'critical' && indicator !== 'major';
-		// @ts-expect-error temp workaround;
-		window.cys_aiOnline = status;
-
-		recordEvent( 'customize_your_store_ai_status', {
-			online: status ? 'yes' : 'no',
-		} );
-
-		return status ? FlowType.AIOnline : FlowType.AIOffline;
-	},
-} );
-
-export const assignAiOffline = assign<
-	customizeStoreStateMachineContext,
-	customizeStoreStateMachineEvents // this is actually the wrong type for the event but I still don't know how to type this properly
->( {
-	flowType: () => {
-		// @ts-expect-error temp workaround;
-		window.cys_aiOnline = false;
-		recordEvent( 'customize_your_store_ai_status', {
-			online: 'no',
-		} );
-
-		return FlowType.AIOffline;
-	},
-} );
-
-export const assignNoAI = assign<
-	customizeStoreStateMachineContext,
-	customizeStoreStateMachineEvents // this is actually the wrong type for the event but I still don't know how to type this properly
->( {
-	flowType: FlowType.noAI,
-} );
-
 export const assignNoAIFlowError = assign<
 	customizeStoreStateMachineContext,
 	customizeStoreStateMachineEvents
@@ -203,4 +161,8 @@ export const assignFlags = assign<
 			window.parent.__wcCustomizeStore.isFontLibraryAvailable || false;
 		return isFontLibraryAvailable;
 	},
+	flowType: ( _context, event ) => {
+		const flowTypeData = event as DoneInvokeEvent< FlowType >;
+		return flowTypeData.data;
+	},
 } );
diff --git a/plugins/woocommerce-admin/client/customize-store/intro/services.ts b/plugins/woocommerce-admin/client/customize-store/intro/services.ts
index 1f024a8105d..22cabff82b1 100644
--- a/plugins/woocommerce-admin/client/customize-store/intro/services.ts
+++ b/plugins/woocommerce-admin/client/customize-store/intro/services.ts
@@ -7,14 +7,16 @@ import { store as coreStore } from '@wordpress/core-data';
 import { resolveSelect } from '@wordpress/data';
 import { ONBOARDING_STORE_NAME, OPTIONS_STORE_NAME } from '@woocommerce/data';
 import apiFetch from '@wordpress/api-fetch';
+import { recordEvent } from '@woocommerce/tracks';
 
 /**
  * Internal dependencies
  */
-import { aiStatusResponse } from '../types';
+import { FlowType, aiStatusResponse } from '../types';
 import { isIframe } from '~/customize-store/utils';
+import { isWooExpress } from '~/utils/is-woo-express';
 
-export const fetchAiStatus = () => async (): Promise< aiStatusResponse > => {
+export const fetchAiStatus = async (): Promise< aiStatusResponse > => {
 	const response = await fetch(
 		'https://status.openai.com/api/v2/status.json'
 	);
@@ -164,4 +166,31 @@ export const setFlags = async () => {
 		// all of them to resolve before returning.
 		await Promise.all( Object.values( _featureFlags ) );
 	}
+
+	// Set FlowType flag. We want to set the flag only in the parent window.
+	if ( isWooExpress() && ! isIframe( window ) ) {
+		try {
+			const { status } = await fetchAiStatus();
+
+			const isAiOnline =
+				status.indicator !== 'critical' && status.indicator !== 'major';
+
+			// @ts-expect-error temp workaround;
+			window.cys_aiOnline = status;
+			recordEvent( 'customize_your_store_ai_status', {
+				online: isAiOnline ? 'yes' : 'no',
+			} );
+
+			return isAiOnline ? FlowType.AIOnline : FlowType.AIOffline;
+		} catch ( e ) {
+			// @ts-expect-error temp workaround;
+			window.cys_aiOnline = false;
+			recordEvent( 'customize_your_store_ai_status', {
+				online: 'no',
+			} );
+			return FlowType.AIOffline;
+		}
+	}
+
+	return FlowType.noAI;
 };
diff --git a/plugins/woocommerce/changelog/46528-fix-set-flow-type b/plugins/woocommerce/changelog/46528-fix-set-flow-type
new file mode 100644
index 00000000000..16d4dcce1c8
--- /dev/null
+++ b/plugins/woocommerce/changelog/46528-fix-set-flow-type
@@ -0,0 +1,4 @@
+Significance: patch
+Type: tweak
+Comment: CYS - set flowType when the state machine is instantiated.
+