[BUG] Claude Code (Cowork) permanently stuck on "Setting up Claude's workspace" loading screen on Windows 11

Preflight Checklist

• [x] I have searched existing issues and this hasn't been reported yet
• [x] This is a single bug report (please file separate reports for different bugs)
• [x] I am using the latest version of Claude Code

What's Wrong?

Claude Code (Cowork app) is permanently stuck on the "Setting up Claude's workspace" loading screen. The loading bar sits at approximately 80–90% indefinitely and never completes, making the app completely unusable.

This has persisted across multiple days, full reinstalls, cache clearing, and extensive troubleshooting steps. The issue appears to be related to workspace/VM initialization failing silently.

What Should Happen?

The app should complete the "Setting up Claude's workspace" initialization and load the main interface successfully.

Error Messages/Logs

No explicit error messages displayed to the user. The loading bar freezes at ~80-90% and the UI hangs indefinitely on "Setting up Claude's workspace" with no further progress or error output visible.

Steps to Reproduce

a1. Install Claude Code (Cowork) v1.1.8629.0 on Windows 11 Pro

1. Launch the app
2. 3. Observe "Setting up Claude's workspace" loading screen appears
3. 4. Loading bar progresses to ~80-90% then stops indefinitely
4. 5. App never proceeds past this screen

Troubleshooting already attempted (none resolved the issue):

• Uninstall/reinstall multiple times
• - Cleared Claude cache folders in AppData
• - - Removed Claude packages from LocalAppData\Packages
• - - - Stopped and restarted CoworkVMService
• - - - - Enabled HypervisorPlatform (was previously disabled, now enabled)
• - - - - - Full PC restarts after each attempt

Claude Model

None

Is this a regression?

No, this never worked

Last Working Version

_No response_

Claude Code Version

1.1.8629.0 (Cowork)

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

Windows Terminal

Additional Information

System Configuration:

• OS: Windows 11 Pro
• - Virtual Machine Platform: Enabled
• - - Windows Hypervisor Platform: Enabled
• - - - Hyper-V hardware support: Yes
• - - - - CoworkVMService: Running, set to Automatic startup

The issue persists regardless of all troubleshooting. This appears to be a complete initialization failure where the VM/workspace setup process hangs and never recovers. No version of the app has ever worked on this machine.