Microsoft has created an incident for this.
https://azure.status.microsoft/en-us/status reports:

 Azure customers running Canonical Ubuntu 18.04 experiencing DNS errors
- Investigating

Starting at approximately 06:00 UTC on 30 Aug 2022, a number of
customers running Ubuntu 18.04 (bionic) VMs recently upgraded to systemd
version 237-3ubuntu10.54 reported experiencing DNS errors when trying to
access their resources. Reports of this issue are confined to this
single Ubuntu version.

This bug and a potential fix have been highlighted on the Canonical /
Ubuntu site, which we encourage impacted customers to read:

https://bugs.launchpad.net/ubuntu/+source/systemd/+bug/1988119

An additional potential workaround customers can consider is to reboot
impacted VM instances so that they receive a fresh DHCP lease and new
DNS resolver(s).

Any Azure service, including AKS, that uses Canonical Ubuntu version
18.04 of Linux may have some impact from this issue. We are working on
mitigations across Azure services that are impacted.

More information will be provided within 60 minutes, when we expect to
know more about the root cause and mitigation workstreams.

This message was last updated at 09:20 UTC on 30 August 2022

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You received this bug notification because you are a member of Ubuntu
Touch seeded packages, which is subscribed to systemd in Ubuntu.
https://bugs.launchpad.net/bugs/1988119

Title:
  Update to systemd 237-3ubuntu10.54 broke dns

Status in systemd package in Ubuntu:
  Confirmed

Bug description:
  Two servers today that updated systemd to "systemd 237-3ubuntu10.54" 
  https://ubuntu.com/security/notices/USN-5583-1

  could not resolve dns anymore.
  no dns servers, normally set through dhcp.

  Ubuntu 18.04

  Temp fix.
   1. Edit /etc/systemd/resolved.conf
   1. Add/Uncomment # FallbackDNS=168.63.129.16
   1. Restart systemd-resolved sudo systemctl restart systemd-resolved.service
   1. Confirm dns working with systemd-resolve google.com

To manage notifications about this bug go to:
https://bugs.launchpad.net/ubuntu/+source/systemd/+bug/1988119/+subscriptions


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