cj-cloud-init.yml

# This config was written for Ubuntu 22.04
# If you are using a more recent version, see the comments of this gist for fixes
#cloud-config
users:
  - name: cj
    ssh_authorized_keys:
      - "ssh-ed25519 AAAAC3NzaC1lZDI1NTE5AAAAINBlfqermlV44zAU+iTCa5im5O0QWXid6sHqh2Z4L1Cm [email protected]"
    sudo: ALL=(ALL:ALL) ALL
    groups: sudo
    shell: /bin/bash
chpasswd:
  expire: true
  users:
    - name: cj
      password: changeme
      type: text
runcmd:
  - sed -i '/PermitRootLogin/d' /etc/ssh/sshd_config
  - echo "PermitRootLogin without-password" >> /etc/ssh/sshd_config
  - sed -i '/PubkeyAuthentication/d' /etc/ssh/sshd_config
  - echo "PubkeyAuthentication yes" >> /etc/ssh/sshd_config
  - sed -i '/PasswordAuthentication/d' /etc/ssh/sshd_config
  - echo "PasswordAuthentication no" >> /etc/ssh/sshd_config
  - systemctl restart sshd
  - echo "\$nrconf{kernelhints} = -1;" > /etc/needrestart/conf.d/99disable-prompt.conf
  - apt update
  - apt upgrade -y --allow-downgrades --allow-remove-essential --allow-change-held-packages
  - reboot

Hm, not of the provided fixes worked for me :(

Here's a version that worked for me (it has some bigger changes compared to the original):

#cloud-config
users:
  - name: yourname
    ssh_authorized_keys:
      - "<SSH_KEY>"
    sudo: ALL=(ALL:ALL) ALL
    groups: sudo
    shell: /bin/bash
chpasswd:
  expire: true
  users:
    - name: yourname
      password: changeme
      type: text
write_files:
  - path: /etc/ssh/sshd_config.d/99-custom.conf
    content: |
      PermitRootLogin without-password
      PubkeyAuthentication yes
      PasswordAuthentication no
runcmd:
  - systemctl restart sshd
  - echo "\$nrconf{kernelhints} = -1;" > /etc/needrestart/conf.d/99disable-prompt.conf
  - apt update
  - apt upgrade -y --allow-downgrades --allow-remove-essential --allow-change-held-packages
  - reboot

I have also encountered issues with running cloud init on Hetzner Ubuntu 24.04 ARM VPS. Unfortunately, sshd was not aliased so I had to use systemclt restart ssh instead.

Here is a config that ended up working for me

#cloud-config
users:
  - name: <username>
    ssh_authorized_keys:
      - <pub_ssh_key>
    sudo: ALL=(ALL:ALL) ALL
    groups: sudo
    shell: /bin/bash
chpasswd:
  expire: true
  users:
    - name: <username>
      password: changeme
      type: text
package_update: true
package_upgrade: true
runcmd:
  - sed -i -e '/^\(#\|\)PermitRootLogin/s/^.*$/PermitRootLogin without-password/' /etc/ssh/sshd_config
  - sed -i -e '/^\(#\|\)PubkeyAuthentication/s/^.*$/PubkeyAuthentication yes/' /etc/ssh/sshd_config
  - sed -i -e '/^\(#\|\)PasswordAuthentication/s/^.*$/PasswordAuthentication no/' /etc/ssh/sshd_config
  - systemctl restart ssh
  - echo "\$nrconf{kernelhints} = -1;" > /etc/needrestart/conf.d/99disable-prompt.conf
power_state:
  delay: 1
  timeout: 60
  mode: reboot
  message: Rebooting after cloud init