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Uff, 169.254.0.0 and 169.254.169.254 are in fact same network, as it is network /16 (mask 255.255.0.0). But the point is different: -to use metadata service Neutron DHCP server will provide a static route to your VM. That static route will be a route 169.254.169.254 via default GW of your network (subnet) - eg. 10.0.0.1 for subnet 10.0.0.0/24. It sounds that it does not happen in your case.