Couple of things to make sure - 

• Check the connection string is pointing to correct database (which it must be in your case).
• Try login with the same credentials if it let's you login to MSSQL.
• Make sure CLI commands you are using are updated.

Additionally, When I was trying to set it up on my local I realized the CLI commands were outdated. I had to figure it out with opening a forum discussion and based on responses I received; Finally got it configured. You can go through my blog post if it helps. 
https://world.optimizely.com/blogs/stackmanoz/dates/2022/3/updated-commands-to-install-commerce14-and-cms12/

I believe those are still spot-on in terms of setting up latest version with optimizely CLI. 

Do let me know if it helped.

Hi Manoj, 

Thanks for the recommendations. Here's what I'm seeing. 

• Check the connection string is pointing to correct database (which it must be in your case). 

"ConnectionStrings": {
    "EPiServerDB": "Data Source=(LocalDb)\\MSSQLLocalDB;AttachDbFilename=|DataDirectory|\\ExampleProject.mdf;Initial Catalog=ExampleProject;Integrated Security=True;Connect Timeout=30"
  },

• Try login with the same credentials if it let's you login to MSSQL.

I can login to SSMS and see the db was created, but there are no tables. 

• Make sure CLI commands you are using are updated.

My versions of optimizely db cli and episerver.templates

• Optimizely database cli tool, v2.0.0 -    
• Episerver.Templates v1.6.0

I used this command to create the alloy template

• dotnet new epi-alloy-mvc

I was under the impression that with the new project templates, the database would be automatically created. It wasn't. So I figured I would try to update the schema and I know the old initialize-epidatabase command no longer works. So i tried dotnet episerver update-database ExampleProject.csproj. I'm getting a SqlException(0x80131904): Cannot attach the file ' C:\users\.dotnet\tools\.store\episerver.net.cli\2.0.0\episerver.net.cli\2.0.0\tools\net6.0\any\ExampleProject.mdf as database 'ExampleProject'

Does that path look fishy? Shouldn't it be trying to attach the mdf file from the App_Data folder as database 'ExampleProject'? There is no mdf file in that location. Why is it looking there?

I am not sure if you need to run dotnet episerver update-database anymore.

This thread which might help you in setting up -

https://world.optimizely.com/forum/developer-forum/cms-12/thread-container/2023/1/dotnet-episerver-create-cms-database-not-working/

Addtionally, You can try following steps in my blog if that helps you - 

https://world.optimizely.com/blogs/stackmanoz/dates/2022/3/updated-commands-to-install-commerce14-and-cms12/

If nothing works at all, We can connect and look at it together.