Unable to Enable "Expose hardware assisted virtualization to the guest OS" on a VM with vGPU or PCI Passthrough Device

Products

• VMware vSphere ESXi

Issue/Introduction

When attempting to enable "Expose hardware assisted virtualization to the guest OS" on a virtual machine, the following error is observed:

Virtualization is not supported on a virtual machine with a PCI passthrough device.

Environment

 

• VMware vSphere / ESXi
• Virtual machine configured with:
  • NVIDIA vGPU 
  • PCI passthrough device (DirectPath I/O)
• Attempting to enable nested virtualization by selecting "Expose hardware assisted virtualization to the guest OS"

 

Cause

This behavior is expected due to a design limitation in ESXi.

Nested virtualization requires the hypervisor to virtualize CPU instructions (such as Intel VT-x or AMD-V) and expose them to the guest operating system.

However, when a virtual machine is configured with a PCI passthrough device (including vGPU), the device bypasses the hypervisor layer and is directly assigned to the virtual machine.

Due to this architectural conflict:

• Nested virtualization requires hypervisor mediation
• PCI passthrough / vGPU bypasses the hypervisor

As a result, these two features are mutually exclusive and cannot be enabled simultaneously on the same virtual machine.

Resolution

This is a limitation by design. To proceed, choose one of the following options:

Option 1: Enable Nested Virtualization

• Remove the vGPU or PCI passthrough device from the virtual machine
• Enable "Expose hardware assisted virtualization to the guest OS"

Option 2: Use GPU Acceleration

• Keep the vGPU or PCI passthrough configuration
• Do not enable nested virtualization

Option 3: Separate Workloads

• Deploy separate virtual machines:
  • One VM for GPU-accelerated workloads
  • One VM for nested virtualization use cases