diff --git a/applications/spring-ai-demo/README.md b/applications/spring-ai-demo/README.md
index 64f9b40..3835ab1 100644
--- a/applications/spring-ai-demo/README.md
+++ b/applications/spring-ai-demo/README.md
@@ -5,20 +5,42 @@
 - Java 21+
 - Langfuse stack ([Cloud](https://cloud.langfuse.com/) or [Self-Hosted](https://langfuse.com/docs/deployment/self-host))
 - Langfuse API Keys
-- An OpenAI Api Key
+- An OpenAI API Key
+
+## Technology Stack
+
+- **Spring Boot**: 4.0.3
+- **Spring AI**: 2.0.0-M2
+- **Java**: 21
+- **OpenTelemetry**: Native support via `spring-boot-starter-opentelemetry`
 
 ## How to run
 
 1. Configure environment variables to connect Spring AI demo app with Langfuse.
-   ```
+   ```bash
    export SPRING_AI_OPENAI_APIKEY="sk-proj-xxx"
-   export OTEL_EXPORTER_OTLP_ENDPOINT="https://cloud.langfuse.com/api/public/otel" # 🇪🇺 EU data region
-   # export OTEL_EXPORTER_OTLP_ENDPOINT="https://us.cloud.langfuse.com/api/public/otel" # 🇺🇸 US data region
-   # export OTEL_EXPORTER_OTLP_ENDPOINT="http://localhost:3000/api/public/otel" # 🏠 Local deployment (>= v3.22.0)
-   export OTEL_EXPORTER_OTLP_HEADERS="Authorization=Basic $(echo -n "pk-lf-xxx:sk-lf-xxx" | base64)"
+   export OTEL_EXPORTER_OTLP_HEADERS_AUTHORIZATION="Basic $(echo -n "pk-lf-xxx:sk-lf-xxx" | base64)"
    ```
-2. Run the sample application with `./mvnw clean install spring-boot:run`.
-3. Call the chat endpoint with `curl localhost:8080/v1/chat`.
+
+2. Run the sample application:
+   ```bash
+   ./mvnw clean install spring-boot:run
+   ```
+
+3. Call the chat endpoint:
+   ```bash
+   curl localhost:8080/v1/chat
+   ```
+
 4. Observe the new trace in the Langfuse web UI.
 
+## Configuration
+
+The application uses native OpenTelemetry support introduced in Spring Boot 4.x. The OTLP endpoint is configured in `OtelConfig.java` to point to `http://localhost:3001/api/public/otel/v1/traces`. 
+
+For cloud deployments, modify the endpoint in `OtelConfig.java`:
+- 🇪🇺 EU: `https://cloud.langfuse.com/api/public/otel/v1/traces`
+- 🇺🇸 US: `https://us.cloud.langfuse.com/api/public/otel/v1/traces`
+- 🏠 Local: `http://localhost:3000/api/public/otel/v1/traces` (>= v3.22.0)
+
 ![sample-trace](./screenshots/spring-ai-demo-trace.png)
diff --git a/applications/spring-ai-demo/pom.xml b/applications/spring-ai-demo/pom.xml
index cfb171b..18c48e8 100644
--- a/applications/spring-ai-demo/pom.xml
+++ b/applications/spring-ai-demo/pom.xml
@@ -5,7 +5,7 @@
     <parent>
         <groupId>org.springframework.boot</groupId>
         <artifactId>spring-boot-starter-parent</artifactId>
-        <version>3.4.3</version>
+        <version>4.0.3</version>
         <relativePath/> <!-- lookup parent from repository -->
     </parent>
     <groupId>com.langfuse</groupId>
@@ -17,18 +17,11 @@
 
     <properties>
         <java.version>21</java.version>
-        <spring-ai.version>1.0.0</spring-ai.version>
+        <spring-ai.version>2.0.0-M2</spring-ai.version>
     </properties>
 
     <dependencyManagement>
         <dependencies>
-            <dependency>
-                <groupId>io.opentelemetry.instrumentation</groupId>
-                <artifactId>opentelemetry-instrumentation-bom</artifactId>
-                <version>2.17.0</version>
-                <type>pom</type>
-                <scope>import</scope>
-            </dependency>
             <dependency>
                 <groupId>org.springframework.ai</groupId>
                 <artifactId>spring-ai-bom</artifactId>
@@ -44,30 +37,30 @@
             <groupId>org.springframework.boot</groupId>
             <artifactId>spring-boot-starter</artifactId>
         </dependency>
-        <dependency>
-            <groupId>org.springframework.ai</groupId>
-            <artifactId>spring-ai-starter-model-openai</artifactId>
-        </dependency>
-        <!-- Spring AI needs a reactive web server to run for some reason-->
+
+        <!-- Web -->
         <dependency>
             <groupId>org.springframework.boot</groupId>
             <artifactId>spring-boot-starter-web</artifactId>
         </dependency>
+
+        <!-- Spring AI (OpenAI model) -->
         <dependency>
-            <groupId>io.opentelemetry.instrumentation</groupId>
-            <artifactId>opentelemetry-spring-boot-starter</artifactId>
+            <groupId>org.springframework.ai</groupId>
+            <artifactId>spring-ai-starter-model-openai</artifactId>
         </dependency>
-        <!-- Spring Boot Actuator for observability support -->
+
+        <!-- ✅ Native OpenTelemetry support (Boot 4 way) -->
         <dependency>
             <groupId>org.springframework.boot</groupId>
-            <artifactId>spring-boot-starter-actuator</artifactId>
+            <artifactId>spring-boot-starter-opentelemetry</artifactId>
         </dependency>
-        <!-- Micrometer Observation -> OpenTelemetry bridge -->
+
+        <!-- Actuator (recommended for observability endpoints) -->
         <dependency>
-            <groupId>io.micrometer</groupId>
-            <artifactId>micrometer-tracing-bridge-otel</artifactId>
+            <groupId>org.springframework.boot</groupId>
+            <artifactId>spring-boot-starter-actuator</artifactId>
         </dependency>
-        <!-- OpenTelemetry OTLP exporter for traces -->
         <dependency>
             <groupId>io.opentelemetry</groupId>
             <artifactId>opentelemetry-exporter-otlp</artifactId>
diff --git a/applications/spring-ai-demo/src/main/java/com/langfuse/springai/OtelConfig.java b/applications/spring-ai-demo/src/main/java/com/langfuse/springai/OtelConfig.java
new file mode 100644
index 0000000..f6fe86e
--- /dev/null
+++ b/applications/spring-ai-demo/src/main/java/com/langfuse/springai/OtelConfig.java
@@ -0,0 +1,28 @@
+package com.langfuse.springai;
+
+import io.opentelemetry.exporter.otlp.http.trace.OtlpHttpSpanExporter;
+import io.opentelemetry.sdk.trace.export.BatchSpanProcessor;
+import io.opentelemetry.sdk.trace.export.SpanExporter;
+import org.springframework.beans.factory.annotation.Value;
+import org.springframework.context.annotation.Bean;
+import org.springframework.context.annotation.Configuration;
+
+@Configuration
+public class OtelConfig {
+
+    @Value("${otel.exporter.otlp.headers.authorization}")
+    private String authorizationHeader;
+
+    @Bean
+    public SpanExporter spanExporter() {
+        return OtlpHttpSpanExporter.builder()
+                .setEndpoint("http://localhost:3001/api/public/otel/v1/traces")
+                .addHeader("Authorization", authorizationHeader)
+                .build();
+    }
+
+    @Bean
+    public BatchSpanProcessor spanProcessor(SpanExporter exporter) {
+        return BatchSpanProcessor.builder(exporter).build();
+    }
+}
\ No newline at end of file
diff --git a/applications/spring-ai-demo/src/main/resources/application.yml b/applications/spring-ai-demo/src/main/resources/application.yml
index ce31f9e..8ea4efa 100644
--- a/applications/spring-ai-demo/src/main/resources/application.yml
+++ b/applications/spring-ai-demo/src/main/resources/application.yml
@@ -13,3 +13,10 @@ management:
   observations:
     annotations:
       enabled: true       # Enable @Observed (if you use observation annotations in code)
+
+otel:
+  exporter:
+    otlp:
+      headers:
+        authorization: {{OTEL_EXPORTER_OTLP_HEADERS_AUTHORIZATION}}  # Set via env var for security}
+