Amazon Web Services (AWS) has introduced nested virtualization for a limited number of its EC2 instances.

The move allows customers to run a hypervisor inside another hypervisor — effectively enabling a VM inside a VM within the cloud.

AWS announced that nested virtualization is now available on its C8i, M8i, and R8i EC2 instance types.

Previously, AWS supported nested virtual machines only on bare metal instances. With this update, more customers can deploy complex virtualized environments without needing dedicated hardware.

Nested virtualization involves running a hypervisor inside another hypervisor. While it may sound unusual, it is widely used for testing, simulation, and certain production workloads.

Why nested virtualization matters

Many enterprise IT environments rely on collections of linked virtual machines. Nested virtualization allows teams to simulate such setups within a cloud-based VM.

The technique is also useful for containerized workloads. Tools like Kubernetes and Docker often run inside a VM, with each container potentially operating within its own virtual machine.

AWS suggests the feature could help in running mobile app emulators, simulating in-vehicle hardware systems, and enabling Windows Subsystem for Linux (WSL) on Windows workstations hosted in the cloud.

Powered by Xeon 6 and Intel TDX

The C8i, M8i, and R8i instances share a common thread: they are powered by Xeon 6 processors from Intel.

These processors include an updated version of Intel’s Trust Domain Extensions (TDX) technology. TDX is designed to improve isolation between a guest operating system and the hypervisor.

All EC2 instances operate on AWS’s proprietary Nitro hypervisor, which divides physical hardware into different instance types. Nitro remains invisible to customers.

To support nested virtualization, the Nitro System passes processor extensions — such as Intel VT-x — to EC2 instances. This enables the architecture’s three layers:

L0: Physical AWS infrastructure and Nitro hypervisor
L1: The customer’s EC2 instance running a hypervisor
L2: One or more virtual machines running inside that instance

Supported hypervisors

At launch, AWS supports either Microsoft’s Hyper-V or the open-source KVM as L1 hypervisors.

This leaves open the possibility of supporting VMware’s ESXi in the future. ESXi remains one of the most widely used enterprise hypervisors, though its owner Broadcom has focused on licensing it as part of its VMware Cloud Foundation (VCF) private cloud suite.

Currently, the Amazon Elastic VMware Service remains the primary way to combine AWS infrastructure with VMware environments.

AWS is not first to introduce nested virtualization in the cloud.

Microsoft Azure and Google Cloud Platform already offer similar capabilities. However, Google Cloud supports only KVM for nested virtualization.

With this move, AWS closes a competitive gap while expanding flexibility for customers building complex, multi-layered virtualized workloads.