diff --git a/upup/pkg/fi/cloudup/azuretasks/subnet.go b/upup/pkg/fi/cloudup/azuretasks/subnet.go
index 43972e27f1..cfaea2baf0 100644
--- a/upup/pkg/fi/cloudup/azuretasks/subnet.go
+++ b/upup/pkg/fi/cloudup/azuretasks/subnet.go
@@ -61,7 +61,7 @@ func (s *Subnet) Find(c *fi.CloudupContext) (*Subnet, error) {
 	if err != nil {
 		var azErr *azcore.ResponseError
 		if errors.As(err, &azErr) {
-			if azErr.ErrorCode == "ResourceNotFound" {
+			if azErr.ErrorCode == "ResourceNotFound" || azErr.ErrorCode == "ResourceGroupNotFound" {
 				return nil, nil
 			} else {
 				return nil, azErr