413 The request body is too large (Active storage direct upload)

Question

Environment Setup

ruby version: 2.7.0
rails version: 6.0.3.6
@rails/activestorage version: "^6.0.0"

Background

We are uploading all the files from our application to azure blob store using active storage direct upload method. It is working perfectly fine for file uploads smaller than 300 MBs. When I try to upload files greater than that I am getting this error

413 (The request body is too large and exceeds the maximum permissible limit.)

Here is how the request and response header looks like

Request Headers

PUT /development/xxxxxxxxxxxxx?sp=rw&sv=2016-05-31&se=2023-10- 
23T10%3A48%3A35Z&sr=b&sig=FN%2BO03fVHeH5kvIB6H3O%2F6mD8410e9RBnNRDW54l0WY%3D HTTP/1.1
Accept: */*
Accept-Encoding: gzip, deflate, br
Accept-Language: en-US,en;q=0.9,ur;q=0.8
Connection: keep-alive
Content-Length: 422997346
Content-MD5: xxxxxxxxxx
Content-Type: application/octet-stream
DNT: 1
Host: xxxxxxx.blob.core.windows.net
Origin: http://localhost:5000
Referer: http://localhost:5000/
Sec-Fetch-Dest: empty
Sec-Fetch-Mode: cors
Sec-Fetch-Site: cross-site
User-Agent: Mozilla/5.0 (Windows NT 10.0; Win64; x64) AppleWebKit/537.36 (KHTML, like Gecko) Chrome/118.0.0.0 Safari/537.36
sec-ch-ua: "Chromium";v="118", "Google Chrome";v="118", "Not=A?Brand";v="99"
sec-ch-ua-mobile: ?0
sec-ch-ua-platform: "Windows"
x-ms-blob-type: BlockBlob

Response Headers

HTTP/1.1 413 The request body is too large and exceeds the maximum permissible limit.
Content-Length: 290
Content-Type: application/xml
Server: Windows-Azure-Blob/1.0 Microsoft-HTTPAPI/2.0
x-ms-request-id: xxxxx-xxxx-xxxx-zzzx-xxxxxxxxx
x-ms-version: 2016-05-31
Access-Control-Expose-Headers: x-ms-request-id,Server,x-ms-version,Content-Length,Date,Transfer-Encoding
Access-Control-Allow-Origin: *

I have read that the solution to this problem is to chunk the file into smaller bits and then when upload is completed combine the smaller bits to make the file again. I have gone through online content indicating but the problem is I think activestorage.js should automatically be doing that. If it is not what is the possible solution here?