The API for creating Azure VMs doesn't support specifying an ED25519 key.
https://docs.microsoft.com/en-us/azure/virtual-machines/linu...
But once you've created the VM you can log in and replace that RSA key with an ED25519 one just like any standard Linux install, via ssh-copy-id or manually updating authorized_keys or whatever you want. So you just need a throwaway RSA key for the initial deployment.
