Windows Server 2025 Datacenter: Azure Edition running as an Azure VM consistently logs FCLIP Event ID 100 failures with error 0x80072EE2.

Problem description I am experiencing issues with my Windows Server 2025 Datacenter: Azure Edition virtual machine in Azure. After rebooting, the Azure-benefit activation fails due to FCLIP IMDS attestation errors and logging on with any account other that the local administrator, I receive a popup accompanied by an event in the logs:

FClip exited at stage Activate Windows by enabling Azure benefits Your Windows Server 2025 Datacenter Azure Edition VM has been deactivated because you are not running on Azure or a supported Azure Stack hypervisor.

However, the VM is running natively in Azure and is able to successfully access IMDS and Azure KMS. The issue appears to be isolated to FCLIP attestation rather than Windows activation itself. FCLIP can be successfully run as the local administrator, but under any other account including system and domain administrators generates the error.

Windows Server 2025 Datacenter: Azure Edition running as an Azure VM consistently logs FCLIP Event ID 100 failures with error 0x80072EE2. The event states: FClip exited at stage Activate Windows by enabling Azure benefits Your Windows Server 2025 Datacenter Azure Edition VM has been deactivated because you are not running on Azure or a supported Azure Stack hypervisor. However, the VM is running natively in Azure and is able to successfully access IMDS and Azure KMS. The issue appears to be isolated to FCLIP attestation rather than Windows activation itself.

Environment Azure Virtual Machine Windows Server 2025 Datacenter: Azure Edition Australia East region Connected via ExpressRoute Domain Controller Fresh Azure deployment (not migrated from on-premises or another cloud provider) PowerShell 5.1 and PowerShell 7 both tested Diagnostics Performed Diagnostics were executed under NT AUTHORITY\SYSTEM to match the FCLIP execution context. IMDS Connectivity tests successful TcpTestSucceeded : True IMDS Metadata Retrieval Successful. Returned values include: azEnvironment : AzurePublicCloud sku : 2025-datacenter-azure-edition location : australiaeast IMDS Route 169.254.169.254/32 -> Default gateway for network on Azure firewall WinHTTP Proxy Direct access (no proxy server) Azure KMS Connectivity Registered KMS machine name: azkms.core.windows.net:1688 Activation Status License Status : Licensed A manual "slmgr /ato" successfully renews activation and updates the activation expiry date as expected.

Observed Behaviour Despite successful: IMDS connectivity IMDS certificate validation IMDS metadata retrieval Azure KMS connectivity Windows activation FCLIP continues to generate Event ID 100 with result 0x80072EE2 Environment Azure virtual machine running Windows Server 2025 Datacenter: Azure Edition in the Australia East region. The intended activation method is Azure KMS / Azure-based activation, with connectivity via ExpressRoute. The VM is not migrated from on-premises or another cloud environment.

What I've already tried I have manually run the FCLIP task as a local administrator, which succeeds and maintains attestation until the next reboot. I have also collected diagnostics, checked network routes, WinHTTP proxy settings, and successfully verify IMDS connectivity and certificate chain validity. I used PowerShell commands to test IMDS access, including Invoke-RestMethod with appropriate headers, and checked for network routing and proxy interference.

Current status Currently, the issue persists with the Azure Edition benefits failing to remain active after reboot due to IMDS attestation issues. I am seeking guidance on how to ensure reliable IMDS attestation during startup to maintain Azure benefits persistently across reboots, and any recommended troubleshooting steps to resolve this. Running the attestation FCLIP.exe scheduled task as the local administrator is not a viable workaround, especially as this machine is to become a domain controller.