We are announcing a public preview for Azure AD user creation support for Azure SQL Database and Azure Synapse Analytics on behalf of Azure AD Applications (service principals). See Azure Active Directory service principal with Azure SQL.
What support for Azure AD user creation on behalf of Azure AD Applications means?
Azure SQL Database, Azure Synapse Analytics (formerly SQL Data Warehouse), and SQL Managed Instance support the following Azure AD objects:
Azure AD users (managed, federated and guest) Azure AD groups (managed and federated) Azure AD applications
For more information on Azure AD applications, see Application and service principal objects in Azure Active Directory and Create an Azure service principal with Azure PowerShell.
Formerly, only SQL