Cowork workspace broken since update - VM service not running
Status Closed — not planned
Reported on v2.1.101
Maintainer reply None cached
Activity 2 comments · opened Apr 15, 2026 · closed May 24, 2026
Bug Description
Cowork workspace fails with "VM service not running. The service failed to start." since updating to Claude v1.2581.0.0
Environment
- Windows 11 25H2 Build 26200 (Insider)
- Claude Desktop: Claude_1.2581.0.0_x64__pzs8sxrjxfjjc
- Claude Code SDK: 2.1.101
- Azure AD joined machine
Details
HCS event logs confirm the VM (cowork-vm-97caf3ee) creates and boots successfully via HCS, but the internal VM service fails. HCS Admin log shows recurring Invalid JSON document dollar (0xC037010D) since the update.
Troubleshooting completed:
- Added user to Hyper-V Administrators group
- Enabled Microsoft-Hyper-V-All feature
- Wiped vm_bundles + sessiondata.vhdx, fresh re-download
- Restarted HCS service + full reboot
- Reinstalled Claude Desktop twice
VM creates and starts fine at HCS level but main.log shows: Session initialization failed: VM service not running.
Logs: %APPDATA%\Claude\logs\main.log, Event Viewer Microsoft-Windows-Hyper-V-Compute-Admin
This issue has 2 comments on GitHub. Read the full discussion on GitHub ↗