After upgrading to ESXi 6.7 Update 1, VM power on fails with "PCI passthrough devices cannot be added when Nested Hardware-Assisted Virtualization is enabled"

Products

• VMware vSphere ESXi

Issue/Introduction

• VDI desktop virtual machines configured with graphics cards in passthrough mode are unable to power on following an upgrade to ESXi 6.7 Update 1.
• Virtual machine power-on operations are failing with the below error message indicating that PCI passthrough devices cannot be added when Nested Hardware-Assisted Virtualization is enabled:

PCI passthrough devices cannot be added when Nested Hardware-Assisted Virtualization is enabled.

• Re-adding a PCI Passthrough device is not possible once it has been removed.

Environment

VMware vSphere ESXi 6.7

Cause

By design, simultaneous enablement of PCI passthrough and nested hardware-assisted virtualization is not supported. Earlier versions did not enforce this configuration check; however, with ESXi 6.7 Update 1, additional validation was added in hostd to prevent the concurrent use of PCI passthrough and nested hardware-assisted virtualization (including vGPU and VVTD).

Resolution

It is not recommended to enable both nested hardware-assisted virtualization and PCI passthrough simultaneously. As a workaround, disable hardware-assisted virtualization for the guest OS.