Microsoft has officially recognized a significant problem affecting Windows Server 2022 virtual machines (VMs) running on VMware ESXi hosts, resulting in blue screen errors and boot failures. This issue emerged following the installation of the KB5031364 October 2023 cumulative update, as reported by Windows administrators.

The problem specifically impacts VMware ESXi hosts that have installed the update from last month’s Patch Tuesday and is characterized by an error displaying a blue screen with the Stop code: PNP DETECTED FATAL ERROR. According to Microsoft’s update on the Windows release health dashboard, this issue is confined to VMware ESXi hosts configured with an AMD Epyc physical processor and having both “Expose IOMMU to guest OS” and “Enable Virtualization Based Security” enabled in the VM settings, along with “System Guard Secure Launch” in Windows Server 2022.

Microsoft’s engineering team is diligently working on a resolution for these VM boot issues, anticipating a potential fix in the coming week. Meanwhile, a temporary workaround involves disabling the “Expose IOMMU to guest OS” option in the settings of the affected VMs. This solution may not be feasible in some environments where this setting is a requirement. Another noted workaround is uninstalling the problematic KB5031364 update using the Windows Update Standalone Installer (WUSA) tool, although this also removes the security patches included in the update.

This isn’t the first instance of Microsoft addressing similar issues. Emergency updates were issued in January and December 2022 to resolve problems with Hyper-V VMs, including start-up failures and difficulties in creating new VMs on some Hyper-V hosts. Furthermore, earlier this year, Microsoft acknowledged a related issue affecting VMware ESXi VMs with Secure Boot after the installation of February 2023 cumulative updates. Following this, VMware promptly released emergency vSphere ESXi updates to address the root cause of these boot issues that prevented VMs from locating a bootable operating system.