diff --git a/scripts/brain-embeddings-init.sql b/scripts/brain-embeddings-init.sql
index de74b50..cf44452 100644
--- a/scripts/brain-embeddings-init.sql
+++ b/scripts/brain-embeddings-init.sql
@@ -21,21 +21,20 @@
 
 \set ON_ERROR_STOP on
 
-DO $$
-BEGIN
-    IF NOT EXISTS (SELECT 1 FROM pg_database WHERE datname = 'brain') THEN
-        CREATE DATABASE brain;
-    END IF;
-END
-$$;
+-- CREATE DATABASE cannot run inside a DO block (transactional limitation).
+-- Use \gexec to emit the statement conditionally instead.
+SELECT 'CREATE DATABASE brain'
+WHERE NOT EXISTS (SELECT FROM pg_database WHERE datname = 'brain')
+\gexec
 
-DO $$
-BEGIN
-    IF NOT EXISTS (SELECT 1 FROM pg_roles WHERE rolname = 'brain_app') THEN
-        EXECUTE format('CREATE ROLE brain_app LOGIN PASSWORD %L', :'password');
-    END IF;
-END
-$$;
+-- DO blocks can't see psql `:'password'` substitutions (those resolve
+-- client-side). Use \if to branch at psql level instead.
+SELECT EXISTS (SELECT FROM pg_roles WHERE rolname = 'brain_app') AS role_exists \gset
+\if :role_exists
+    ALTER ROLE brain_app WITH PASSWORD :'password';
+\else
+    CREATE ROLE brain_app LOGIN PASSWORD :'password';
+\endif
 
 GRANT ALL PRIVILEGES ON DATABASE brain TO brain_app;