What was it that Wendell said about Fedora 26 that was exciting?

I remember him saying something like Fedora 26 would support virtual machines using direct access to the PC hardware.

I can't seem to recall the details or find any article from Fedora about this.

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I do not keep up with the channel as I used to so I do not know. But fedora does have a site dedicated to changes from Os version to Os version and VM is not in there.

https://fedoraproject.org/wiki/Releases/26/ChangeSet

F26 does not come out until June, that's a long time and the change set page updates often so if they are working on whatever it is it wil be added to that page.

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He was mentioning that their goal was to flip a switch and have GPU Passthrough in a VM. It's definitely a cool concept, but I'm not sure how well it will work in practice. At least given my knowledge of passthrough.

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You also still need 2 GPUS ?

Probably. I'm doing some work to see about less GPU's, but it's not going well right now. Not enough time to devote.

The reason why it will primarily work in Fedora is because Fedora has the best and most recent support for open source KMS drivers. The hardware sharing function is not a Fedora functionlaity, it is a kernel 4.10 functionality, if you want to know how it works, check the news pages of kernel.org or the linux foundation. It's basically an advanced addressing feature that builds further upon the amazing features implemented in the kernel since version 4.
To do graphics passthrough (single GPU, full feature and performance passthrough), you need to be working with KMS drivers. In the case of Intel, that is a given. Intel GPU's, notwithstanding the fact that they are huge market leaders with almost 2/3 of the world market, do not have any performance level that would be interesting for functional passthrough. AMD GPU's are the cool stuff, because they run at pretty much full features and full performance on the new AMDGPU KMS drivers (which also work for GCN 1.0 card by the way since kernel 4.9, I've tested it and I've not been able to fault it, it's not a half baked support, it just works), and, using the AMDGPU-PRO proprietary drivers, builds on the KMS drivers, is basically a userspace extension if you will, so it's perfectly possible in a passthrough situation (still has to be tested though). nVidia of course doesn't want its GPU's to run on Linux, so not really an option, the KMS drivers (nouveau) for nVidia don't unlock much performance, and the GPU's themselves are simpler and narrower bus designs to begin with, so the bulk of the performance of nVidia GPU's basically comes from artificial software limitations and overclocking in conjuntion with proprietary commercial code, code which is not available for non-commercial applications and non-closed-source-commercial operating systems because nVidia lol...

The cool things about this: if you have a laptop with a single GPU, Intel or AMD, and you have 8 GB of RAM... you can now run your games in a virtual guest, hallelujah! This is a pretty big deal, not only for laptops, but also for small form factor PC's. Besides the advantage of not having to buy an extra GPU if you have a CPU without iGPU of course...

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So what you're saying is that I can probably get my laptop to run Fedora as the main OS and KVM Windows for gaming now? Even though the CPU doesn't have an embedded GPU in it?

Yup.

It should work with the 20000 lines of code of Hyper-V that are in the Linux kernel to work it with Windows, but obviously it wasn't actually made for that, it was made to work between Linux distros... there is no telling if Windows will be able to handle it, and you also have to take into consideration that Microsoft probably doesn't want users to do that, so there may be issues. First issue I can think of is that you won't be running a legal version of Windows if you have a laptop that came with Windows 8, 8.1 or 10 preinstalled, because in order for the license to be used legally, it needs to run on the bare metal. Second thing I can think of, is that many Windows-preinstalled laptops have a very reduced BIOS that might not allow you to turn on IOMMU, which you need in order to do the passthrough.

I'm not familiar at all with IOMMU -derp derp cut out-- but no my laptop doesn't have IOMMU apparently.

Can you not passthrough the TPM into the VM to allow for Windows authentication?

Yes you can pass TPM to VMs, there is an option available for it in the virt-manger gui tool.