It doesn't seem to be caused by a race between networkd and
NetworkManager.

I reproduced the issue with qemu here and I see the name resolution
failure happening few seconds before NetworkManager started.

>From /var/log/cloud-init.log:

2023-03-09 19:17:58,443 - util.py[DEBUG]: Getting data from <class 
'cloudinit.sources.DataSourceNoCloud.DataSourceNoCloudNet'> failed
Traceback (most recent call last):
...
cloudinit.url_helper.UrlError: HTTPConnectionPool(host='boot.linuxgroove.com', 
port=80): Max retries exceeded with url: /ubuntu/23.04/meta-data (Caused by 
NewConnectionError('<urllib3.connection.HTTPConnection object at 
0x7f650b663610>:
Failed to establish a new connection: [Errno -3] Temporary failure in name 
resolution'))

>From systemd's journal
Mar 09 19:18:01 ubuntu systemd[1]: Starting NetworkManager.service - Network 
Manager...

(edit)

resolved wasn't running as well

2023-03-09T19:18:01.712656+00:00 ubuntu systemd[1]: Starting systemd-
resolved.service - Network Name Resolution...

-- 
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https://bugs.launchpad.net/bugs/2008952

Title:
  DNS failure while trying to fetch user-data

Status in cloud-init:
  Triaged
Status in netplan:
  New
Status in subiquity:
  New
Status in systemd package in Ubuntu:
  New

Bug description:
  In testing netboot + autoinstall of the new ubuntu desktop subiquity
  based installer for 23.04 I found cloud-init is failing to retrieve
  user-data because it can't resolved the hostname in the URL.  This
  same configuration does work for 22.04 based subiquity, so seems a
  regression.

  From the ipxe config:

  imgargs vmlinuz initrd=initrd \
   ip=dhcp \
   iso-url=http://cdimage.ubuntu.com/daily-live/pending/lunar-desktop-amd64.iso 
\
   fsck.mode=skip \
   layerfs-path=minimal.standard.live.squashfs \
   autoinstall \
   'ds=nocloud-net;s=http://boot.linuxgroove.com/ubuntu/23.04/' \

  That fails, but if we replace boot.linuxgroove.com with the IP it
  works.

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