diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-cloudinit/coreos-cloudinit-0.1.2-r4.ebuild b/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-cloudinit/coreos-cloudinit-0.1.2-r5.ebuild
similarity index 100%
rename from sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-cloudinit/coreos-cloudinit-0.1.2-r4.ebuild
rename to sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-cloudinit/coreos-cloudinit-0.1.2-r5.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 c65eabcb82..f3ba59c155 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="06cf75b6607b244c15c85ef13c2f9c8c20bcbbe0"  # v0.1.2+git
+	CROS_WORKON_COMMIT="c2faaa503b3dfbaa58960db36bdc77a9c7b02ce2"  # v0.1.2+git
 	KEYWORDS="amd64"
 fi
 
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-ami/files/cloud-config.yml b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-ami/files/cloud-config.yml
index b90b719cb6..aebe881c92 100644
--- a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-ami/files/cloud-config.yml
+++ b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-ami/files/cloud-config.yml
@@ -24,7 +24,7 @@ coreos:
           [Service]
           Type=oneshot
           EnvironmentFile=/etc/environment
-          ExecStart=/usr/bin/coreos-cloudinit -from-url=http://169.254.169.254/latest/user-data
+          ExecStart=/usr/bin/coreos-cloudinit -ignore-failure=true -from-url=http://169.254.169.254/latest/user-data
       - name: ec2-c10n.service
         runtime: yes
         content: |