Public bug reported:

Recent (?) OpenSSH versions supports ed25519 keys and Ubuntu specifies
the following its sshd_config:

HostKey /etc/ssh/ssh_host_ed25519_key

Unfortunately, cloudinit deletes all the key in /etc/ssh, and doesn't
recreate that specific key. It should regenerate one of those key, or
remove the option from the configuration file.

The main side effect currently is an ugly error message during
authentication. In /var/log/auth.log:

sshd: error: Could not load host key: /etc/ssh/ssh_host_ed25519_key

** Affects: cloud-init
     Importance: Undecided
         Status: New

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https://bugs.launchpad.net/bugs/1382118

Title:
  Cloud-init doesn't support SSH ed25519 keys

Status in Init scripts for use on cloud images:
  New

Bug description:
  Recent (?) OpenSSH versions supports ed25519 keys and Ubuntu specifies
  the following its sshd_config:

  HostKey /etc/ssh/ssh_host_ed25519_key

  Unfortunately, cloudinit deletes all the key in /etc/ssh, and doesn't
  recreate that specific key. It should regenerate one of those key, or
  remove the option from the configuration file.

  The main side effect currently is an ugly error message during
  authentication. In /var/log/auth.log:

  sshd: error: Could not load host key: /etc/ssh/ssh_host_ed25519_key

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