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I've created a VM on Azure and after installing all my software basics I'm trying to perform a sysprep.exe's generalize and I'm getting the following error:

A fatal error ocurred while trying to sysprep the machine

I've searched online for multiple solutions with no luck. Seems this is a "general" problem with not a single and working reply. I executed the slmgr /dlv command and saw I'm supposed to have 1000 rearms left.

Any ideas? Many thanks.

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I have created a clean installation and performing sysprep after each “basic software” installation, which uncovered a culprit.

One of my "software basics" included Azure File Sync, by Microsoft.

I installed the 10.1.0.0 version, which on the interoperability notes says:

Running sysprep on a server that has the Azure File Sync agent installed is not supported and can lead to unexpected results. The Azure File Sync agent should be installed after deploying the server image and completing sysprep mini-setup.

Sysprep's error log:

2020-08-07 13:29:37, Error [0x0f0085] SYSPRP LaunchDll:Could not load DLL C:\Program Files\ Azure\StorageSyncAgent\AfsSysprepProvider.dll[gle=0x0000007e]

And that's it. I simply need to install Azure File Sync after everything, including the sysprep. Hope it helps you.

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