As of vSphere 7.0 Update 1, Xorg is no longer required for graphics devices in vGPU mode and may not start when using them. This will not affect the assignment of vGPU profiles to virtual machines. The ESXi host is still able to interact with the cards via the Nvidia Virtual GPU Manager contained in the Nvidia VIBs. The command
nvidia-smi can be used to determine if the Nvidia Virtual GPU Manager has been successfully loaded in ESXi.
Xorg is still required and must be able to start if the graphics device will be used in shared mode vSGA. vSGA is not supported on all graphics cards. A full list of vSGA supported devices can be found in the
Virtual Shared Graphics Acceleration Guide.