[BUG] Cowork — VM service not running. The service failed to start.

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?

Bug: Cowork — VM service not running. The service failed to start.

Environment:

• OS: Windows 11
• Claude Desktop version: 1.1.9493.0
• Hyper-V: Enabled (confirmed via PowerShell)

Error message:
"Failed to start Claude's workspace — VM service not running. The service failed to start."

What happens:
Every time Cowork starts, the following sequence occurs in cowork_vm_node.log:

1. smol-bin.x64.vhdx copied successfully
2. "Configuring Windows VM service..."
3. Startup failed: VM service not running (5 seconds later)

In cowork-service.log, the service starts correctly, initializes HCS DLLs, loads vmcompute.dll and computecore.dll, enumerates HCN networks, starts the named pipe server, connects the client — then stops immediately when Claude asks it to configure the VM.

What I have already tried:

• Enabled Hyper-V (was disabled, now confirmed Enabled)
• Verified vmms, vmcompute, and hvhost services are all Running
• Granted icacls permissions to NT VIRTUAL MACHINE\Virtual Machines on the VHDX file and vm_bundles folder
• Launched Claude as Administrator
• Disabled Windows Defender temporarily — no change
• Manually created sessiondata.vhdx (10GB dynamic) and the cowork-vm-nat NetNat rule
• Started CoworkVMService manually via PowerShell — service starts but stops as soon as Claude calls the configure method

WIN32_EXIT_CODE: 1067

Relevant log line:
Warning: failed to open service for recovery config: Access is denied.

This appears to be the same issue reported in #27801, #27010, #25206 and others. The CoworkVMService starts successfully but crashes when Claude Desktop calls the configure method. The root cause seems to be a permissions issue within the packaged app (WindowsApps) that prevents the service from completing its configuration step.

Please advise or provide a fix. Happy to share full log files if needed.

What Should Happen?

Cowork should start successfully. The CoworkVMService should remain running after the configure method is called by Claude Desktop, and the VM should boot and be accessible in the Cowork workspace without any errors.

Error Messages/Logs

Steps to Reproduce

1.Install Claude Desktop on Windows 11 (Microsoft Store version)
2.Open Claude Desktop and navigate to the Cowork tab
3.Observe the error: "Failed to start Claude's workspace — VM service not running. The service failed to start."

Additional context to reproduce:

• Hyper-V was initially disabled — enabling it does not fix the issue
• CoworkVMService exists and starts manually via PowerShell, but stops within 5 seconds when Claude calls the configure method
• The error occurs on every launch, consistently, with no workaround found

Claude Model

Sonnet (default)

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

1.1.9493.0

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

PowerShell

Additional Information

_No response_