- Microsoft's January update is causing some Cloud PC connections to fail
- Two in-house teams are collaborating on a fix "in the coming days"
- The build has already resolved one issue related to Azure Virtual Desktop
Microsoft has confirmed that a recent Windows update may be preventing some users from accessing their Microsoft 365 Cloud PCs. While a temporary workaround is available, a formal fix has yet to be released.
The issue began around 7 PM UTC on January 13, with users experiencing sign-in failures and intermittent access problems, as reported by Bleeping Computer.
Microsoft attributed the problem to OS Build 26100.7623 (KB5074109), but stated that the Azure Virtual Desktop and Windows Update teams are working together to find a solution.
Microsoft Acknowledges Cloud PC Error
Devices affected include Windows 11 versions 25H2, 24H2, and 23H2; Windows 10 versions 22H2 and 21H2; as well as Windows 10 Enterprise LTSC 2019 and 2016.
According to a status update, "After installing the January 2026 Windows security update (KB5074109), credential prompt failures occurred during Remote Desktop connections using the Windows App on Windows client devices, impacting Azure Virtual Desktop and Windows 365."
For the time being, users are advised to utilize the Windows App Web Client (windows.cloud.microsoft) or the Remote Desktop client to connect to Azure Virtual Desktop.
Microsoft has assured users that they are actively working on a resolution and plan to release an out-of-band (OOB) update shortly.
This issue is the more significant of two known problems related to the latest Windows build; another issue involves a missing password icon on the lock screen. The update also addresses previously known issues, such as reduced battery performance from an active NPU during idle time and RemoteApp connection failures in Azure Virtual Desktop environments.