diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-cloudinit/coreos-cloudinit-0.3.0.ebuild b/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-cloudinit/coreos-cloudinit-0.3.1.ebuild
similarity index 100%
rename from sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-cloudinit/coreos-cloudinit-0.3.0.ebuild
rename to sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-cloudinit/coreos-cloudinit-0.3.1.ebuild
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-cloudinit/coreos-cloudinit-9999.ebuild b/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-cloudinit/coreos-cloudinit-9999.ebuild
index fdc01c19a3..ce6e54886d 100644
--- a/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-cloudinit/coreos-cloudinit-9999.ebuild
+++ b/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-cloudinit/coreos-cloudinit-9999.ebuild
@@ -9,7 +9,7 @@ CROS_WORKON_REPO="git://github.com"
 if [[ "${PV}" == 9999 ]]; then
 	KEYWORDS="~amd64"
 else
-	CROS_WORKON_COMMIT="e68134d88480595211ea594b10be3316f19085b5"  # v0.3.0
+	CROS_WORKON_COMMIT="4977c774d81d1326e0099692afc87fa002c003ad"  # v0.3.1
 	KEYWORDS="amd64"
 fi
 
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-vagrant/files/cloud-config.yml b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-vagrant/files/cloud-config.yml
index 17890ae0f6..7d28afa66f 100644
--- a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-vagrant/files/cloud-config.yml
+++ b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-vagrant/files/cloud-config.yml
@@ -13,7 +13,11 @@ coreos:
       - name: coreos-cloudinit-vagrant.service
         runtime: no
         content: |
+          [Unit]
+          ConditionFileNotEmpty=/var/lib/coreos-vagrant/user-data
+
           [Service]
           Type=oneshot
           EnvironmentFile=/etc/environment
           ExecStart=/usr/bin/coreos-cloudinit --from-file /var/lib/coreos-vagrant/user-data
+          RemainAfterExit=yes