diff --git a/packages/sanity/src/_internal/cli/util/__tests__/shouldAutoUpdate.test.ts b/packages/sanity/src/_internal/cli/util/__tests__/shouldAutoUpdate.test.ts
new file mode 100644
index 00000000000..5084ab44953
--- /dev/null
+++ b/packages/sanity/src/_internal/cli/util/__tests__/shouldAutoUpdate.test.ts
@@ -0,0 +1,40 @@
+import {describe, expect, it} from '@jest/globals'
+import {type CliConfig} from '@sanity/cli'
+
+import {type BuildSanityStudioCommandFlags} from '../../actions/build/buildAction'
+import {shouldAutoUpdate} from '../shouldAutoUpdate'
+
+describe('shouldAutoUpdate', () => {
+  it('should return true when flags["auto-updates"] is true', () => {
+    const flags: BuildSanityStudioCommandFlags = {'auto-updates': true}
+    expect(shouldAutoUpdate({flags})).toBe(true)
+  })
+
+  it('should return false when flags["auto-updates"] is false', () => {
+    const flags: BuildSanityStudioCommandFlags = {'auto-updates': false}
+    expect(shouldAutoUpdate({flags})).toBe(false)
+  })
+
+  it('should return true when cliConfig.autoUpdates is true and flags["auto-updates"] is not set', () => {
+    const flags: BuildSanityStudioCommandFlags = {}
+    const cliConfig: CliConfig = {autoUpdates: true}
+    expect(shouldAutoUpdate({flags, cliConfig})).toBe(true)
+  })
+
+  it('should return false when cliConfig.autoUpdates is false and flags["auto-updates"] is not set', () => {
+    const flags: BuildSanityStudioCommandFlags = {}
+    const cliConfig: CliConfig = {autoUpdates: false}
+    expect(shouldAutoUpdate({flags, cliConfig})).toBe(false)
+  })
+
+  it('should return false when both flags["auto-updates"] and cliConfig.autoUpdates are not set', () => {
+    const flags: BuildSanityStudioCommandFlags = {}
+    expect(shouldAutoUpdate({flags})).toBe(false)
+  })
+
+  it('should prioritize flags over cliConfig when both are set', () => {
+    const flags: BuildSanityStudioCommandFlags = {'auto-updates': false}
+    const cliConfig: CliConfig = {autoUpdates: true}
+    expect(shouldAutoUpdate({flags, cliConfig})).toBe(false)
+  })
+})