diff --git a/changelog/bugfixes/2024-01-15-coreos-cloudinit.md b/changelog/bugfixes/2024-01-15-coreos-cloudinit.md
new file mode 100644
index 0000000000..87a7ced674
--- /dev/null
+++ b/changelog/bugfixes/2024-01-15-coreos-cloudinit.md
@@ -0,0 +1 @@
+- Fixed a bug resulting in coreos-cloudinit resetting the instance hostname to 'localhost' if no metadata could be found ([coreos-cloudinit#25](https://github.com/flatcar/coreos-cloudinit/pull/25))
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-cloudinit/coreos-cloudinit-1.14.0-r6.ebuild b/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-cloudinit/coreos-cloudinit-1.14.0-r7.ebuild
similarity index 100%
rename from sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-cloudinit/coreos-cloudinit-1.14.0-r6.ebuild
rename to sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-cloudinit/coreos-cloudinit-1.14.0-r7.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 89a54869fa..a9abc0901d 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
@@ -12,7 +12,7 @@ inherit cros-workon systemd toolchain-funcs udev coreos-go
 if [[ "${PV}" == 9999 ]]; then
 	KEYWORDS="~amd64 ~arm64"
 else
-	CROS_WORKON_COMMIT="47bc4cfae35357d88f84e8fdb65c787054fc17a3" # flatcar-master
+	CROS_WORKON_COMMIT="47d54a38e766a30c7ab9caabf2292e885505ffe0" # flatcar-master
 	KEYWORDS="amd64 arm64"
 fi