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Windows cannot run as a VM on qemu-kvm without hardware acceleration. When you have in nova compute nova.conf "virt_type=qemu", the processor capabilities exposed by qemu without hardware acceleration are not on par with the Windows processor requirements.

The solution in your case is to enable nested virtualization for the Linux machine, in the corresponding .vmx configuration file, by adding:

 vcpu.hotadd = "FALSE"
 featMask.vm.hv.capable = "Min:1"
 vhv.enable = "TRUE"

Make sure you remove (not delete) the Linux machine from the ESXi inventory, edit the .vmx accordingly and open the .vmx afterwards.

After this step, you can set "virt_type=kvm" and resume the instance spawning.

Thanks, Adrian.