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This seems like a concurrency issue between cloudbase-init, which initiates a reboot while a service is installed by one of the nvidia driver inf directives. This happens when the sysprep's generalize step is configured to not persist the already installed drivers, and when drivers are reloaded, the inf directives for each are also executed (

Can you give more details on how did you generate the Windows image (host/tools) and what sysprep unattend.xml have you used?

A possible solution for your problem: if you generate the Windows image on a KVM host, install the drivers and cloudbase-init, then sysprep it with PersistAllDeviceInstalls on true, it should skip the driver reload and service install at the first boot.

Thank you,