Yeah, it is definitely because ec2 does not allow nested virtualization; however, all other major cloud providers do allow it. I always assumed that the reason

Yeah, it is definitely because ec2 does not allow nested virtualization; however, all other major cloud providers do allow it. I always assumed that the reason it was disabled had something to do with nested virtualization being less mature in xen-hvm than in kvm. I don't know if it is actually less mature in xen-hvm, but all of the other cloud providers are using other hypervisors so I figured xen-hvm was relevant. That said, Amazon has now released the m5, c5, etc instance types which run on kvm, but nested virtualization is still not supported. Regardless of stability and performance, it's frustrating that they outright disable nested virtualization because it is useful in so many cases that aren't performance-critical where you really need to just run a VM: like building virtual machine images, adding another layer of isolation for untrusted software, or working with applications that cause kernel bugs (chromedriver a few years back was plaguing us with system deadlocks running at scale), etc.