diff --git a/server/src/main/java/org/elasticsearch/TransportVersions.java b/server/src/main/java/org/elasticsearch/TransportVersions.java
index 7e7c3fc96e47b..c25825475aa9c 100644
--- a/server/src/main/java/org/elasticsearch/TransportVersions.java
+++ b/server/src/main/java/org/elasticsearch/TransportVersions.java
@@ -219,7 +219,6 @@ static TransportVersion def(int id) {
     public static final TransportVersion SIMULATE_COMPONENT_TEMPLATES_SUBSTITUTIONS = def(8_743_00_0);
     public static final TransportVersion ML_INFERENCE_IBM_WATSONX_EMBEDDINGS_ADDED = def(8_744_00_0);
 
-
     /*
      * STOP! READ THIS FIRST! No, really,
      *        ____ _____ ___  ____  _        ____  _____    _    ____    _____ _   _ ___ ____    _____ ___ ____  ____ _____ _
diff --git a/x-pack/plugin/inference/src/main/java/org/elasticsearch/xpack/inference/external/request/ibmwatsonx/IbmWatsonxEmbeddingsRequest.java b/x-pack/plugin/inference/src/main/java/org/elasticsearch/xpack/inference/external/request/ibmwatsonx/IbmWatsonxEmbeddingsRequest.java
index 5504cbe8a67ba..798cac5de00ec 100644
--- a/x-pack/plugin/inference/src/main/java/org/elasticsearch/xpack/inference/external/request/ibmwatsonx/IbmWatsonxEmbeddingsRequest.java
+++ b/x-pack/plugin/inference/src/main/java/org/elasticsearch/xpack/inference/external/request/ibmwatsonx/IbmWatsonxEmbeddingsRequest.java
@@ -50,7 +50,7 @@ public HttpRequest createHttpRequest() {
         httpPost.setEntity(byteEntity);
         httpPost.setHeader(HttpHeaders.CONTENT_TYPE, XContentType.JSON.mediaType());
 
-        IbmWatsonxRequest.decorateWithBearerToken(httpPost, model.getSecretSettings());
+        IbmWatsonxRequest.decorateWithBearerToken(httpPost, model.getSecretSettings(), model.getInferenceEntityId());
 
         return new HttpRequest(httpPost, getInferenceEntityId());
     }
diff --git a/x-pack/plugin/inference/src/main/java/org/elasticsearch/xpack/inference/external/request/ibmwatsonx/IbmWatsonxRequest.java b/x-pack/plugin/inference/src/main/java/org/elasticsearch/xpack/inference/external/request/ibmwatsonx/IbmWatsonxRequest.java
index 6a92eefc88b66..e5ac64624a697 100644
--- a/x-pack/plugin/inference/src/main/java/org/elasticsearch/xpack/inference/external/request/ibmwatsonx/IbmWatsonxRequest.java
+++ b/x-pack/plugin/inference/src/main/java/org/elasticsearch/xpack/inference/external/request/ibmwatsonx/IbmWatsonxRequest.java
@@ -18,10 +18,13 @@
 import org.apache.http.message.BasicHeader;
 import org.apache.logging.log4j.LogManager;
 import org.apache.logging.log4j.Logger;
+import org.elasticsearch.ElasticsearchStatusException;
 import org.elasticsearch.common.xcontent.XContentHelper;
+import org.elasticsearch.rest.RestStatus;
 import org.elasticsearch.xcontent.XContentParseException;
 import org.elasticsearch.xcontent.XContentType;
 import org.elasticsearch.xpack.core.common.socket.SocketAccess;
+import org.elasticsearch.xpack.inference.external.http.retry.RetryException;
 import org.elasticsearch.xpack.inference.external.request.Request;
 import org.elasticsearch.xpack.inference.services.settings.DefaultSecretSettings;
 
@@ -30,9 +33,17 @@
 import java.nio.charset.StandardCharsets;
 import java.util.Map;
 
+import static org.elasticsearch.core.Strings.format;
+import static org.elasticsearch.xpack.inference.external.http.retry.BaseResponseHandler.AUTHENTICATION;
+import static org.elasticsearch.xpack.inference.external.http.retry.BaseResponseHandler.BAD_REQUEST;
+import static org.elasticsearch.xpack.inference.external.http.retry.BaseResponseHandler.PERMISSION_DENIED;
+import static org.elasticsearch.xpack.inference.external.http.retry.BaseResponseHandler.REDIRECTION;
+import static org.elasticsearch.xpack.inference.external.http.retry.BaseResponseHandler.SERVER_ERROR;
+import static org.elasticsearch.xpack.inference.external.http.retry.BaseResponseHandler.UNSUCCESSFUL;
+
 public interface IbmWatsonxRequest extends Request {
 
-    static void decorateWithBearerToken(HttpPost httpPost, DefaultSecretSettings secretSettings) {
+    static void decorateWithBearerToken(HttpPost httpPost, DefaultSecretSettings secretSettings, String inferenceId) {
         final Logger logger = LogManager.getLogger(IbmWatsonxRequest.class);
         String bearerTokenGenUrl = "https://iam.cloud.ibm.com/identity/token";
         String bearerToken = "";
@@ -48,6 +59,7 @@ static void decorateWithBearerToken(HttpPost httpPost, DefaultSecretSettings sec
 
             bearerToken = SocketAccess.doPrivileged(() -> {
                 HttpResponse response = httpClient.execute(httpPostForBearerToken);
+                validateResponse(bearerTokenGenUrl, inferenceId, response);
                 HttpEntity entity = response.getEntity();
                 Map<String, Object> map;
                 try (InputStream content = entity.getContent()) {
@@ -63,4 +75,68 @@ static void decorateWithBearerToken(HttpPost httpPost, DefaultSecretSettings sec
         Header bearerHeader = new BasicHeader(HttpHeaders.AUTHORIZATION, "Bearer " + bearerToken);
         httpPost.setHeader(bearerHeader);
     }
+
+    static void validateResponse(String bearerTokenGenUrl, String inferenceId, HttpResponse response) {
+        int statusCode = response.getStatusLine().getStatusCode();
+        if (statusCode >= 200 && statusCode < 300) {
+            return;
+        }
+
+        if (statusCode == 500) {
+            throw new RetryException(true, buildError(SERVER_ERROR, inferenceId, response));
+        } else if (statusCode == 404) {
+            throw new RetryException(false, buildError(resourceNotFoundError(bearerTokenGenUrl), inferenceId, response));
+        } else if (statusCode == 403) {
+            throw new RetryException(false, buildError(PERMISSION_DENIED, inferenceId, response));
+        } else if (statusCode == 401) {
+            throw new RetryException(false, buildError(AUTHENTICATION, inferenceId, response));
+        } else if (statusCode == 400) {
+            throw new RetryException(false, buildError(BAD_REQUEST, inferenceId, response));
+        } else if (statusCode >= 300 && statusCode < 400) {
+            throw new RetryException(false, buildError(REDIRECTION, inferenceId, response));
+        } else {
+            throw new RetryException(false, buildError(UNSUCCESSFUL, inferenceId, response));
+        }
+    }
+
+    private static String resourceNotFoundError(String bearerTokenGenUrl) {
+        return format("Resource not found at [%s]", bearerTokenGenUrl);
+    }
+
+    private static Exception buildError(String message, String inferenceId, HttpResponse response) {
+        var errorMsg = response.getStatusLine().getReasonPhrase();
+        var responseStatusCode = response.getStatusLine().getStatusCode();
+
+        if (errorMsg == null) {
+            return new ElasticsearchStatusException(
+                format(
+                    "%s for request to generate Bearer Token from inference entity id [%s] status [%s]",
+                    message,
+                    inferenceId,
+                    responseStatusCode
+                ),
+                toRestStatus(responseStatusCode)
+            );
+        }
+
+        return new ElasticsearchStatusException(
+            format(
+                "%s for request to generate Bearer Token from inference entity id [%s] status [%s]. Error message: [%s]",
+                message,
+                inferenceId,
+                responseStatusCode,
+                errorMsg
+            ),
+            toRestStatus(responseStatusCode)
+        );
+    }
+
+    private static RestStatus toRestStatus(int statusCode) {
+        RestStatus code = null;
+        if (statusCode < 500) {
+            code = RestStatus.fromCode(statusCode);
+        }
+
+        return code == null ? RestStatus.BAD_REQUEST : code;
+    }
 }