Cloud-Init on bare metal

[alex]

I am trying to use cloud-init to centrally manage a number of hosts. I 
managed to get auto-install working using 20.04 LTS. My next step is to 
use cloud-init to apply additional configuration for security etc. My 
hope is to use cloud-init and possibly the nocloud-net datassource as 
described here: 
https://cloudinit.readthedocs.io/en/latest/topics/datasources/nocloud.html#datasource-nocloud

I have tried updating /etc/default/grub followed by update-grub.

GRUB_DEFAULT=0
#GRUB_TIMEOUT_STYLE=hidden
GRUB_TIMEOUT=10
GRUB_DISTRIBUTOR=`lsb_release -i -s 2> /dev/null || echo Debian`
GRUB_CMDLINE_LINUX_DEFAULT="ds=nocloud-net;seedfrom=http://192.168.0.172/ubuntu/config/"
GRUB_CMDLINE_LINUX=""

However this doesn't seem to work. I am starting to wonder if this is 
the right approach to achieve this and what other options are available.

Any pointers on if it is possible to use the nocloud-net datasource with 
grub ? Any other options.

Kind regards
Alex