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Windows 11 KB5074109 Update Released Amidst Feature Rollouts and User-Reported Issues

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Windows 11 January 2026 Update (KB5074109): Features, Fixes, and User Concerns

Microsoft has rolled out the KB5074109 update for Windows 11 versions 25H2 and 24H2, marking the first Patch Tuesday release of 2026. This mandatory update brings crucial security patches, bug fixes, and a gradual rollout of new features. However, its release has been met with a range of critical issues reported by users, leading to cautious recommendations for adoption, particularly for professionals and gamers. Looking ahead, Microsoft has also confirmed plans for the Windows 11 26H2 update, anticipated in late 2026.

January 2026 Update (KB5074109) Overview

The KB5074109 update advances Windows 11 PCs to Build 26200.7623 for version 25H2 and Build 26100.7623 for version 24H2, both sharing an identical changelog. It is readily available through Windows Update and as direct download links for offline installers. The update is notably substantial in size, exceeding 4GB, partly due to the inclusion of AI models like Phi, which are bundled for all hardware types, including non-AI PCs.

Security and Bug Fixes

This significant update incorporates 114 security vulnerability patches, substantially enhancing the overall security posture of the operating system. Key bug fixes and improvements include:

  • Windows Subsystem for Linux (WSL): Resolution of an issue preventing WSL from functioning when accessing resources via a VPN.
  • Azure Virtual Desktop (AVD): Fixes for errors encountered in AVD environments during Remote Desktop use.
  • Neural Processing Units (NPUs): Correction of a bug where NPUs negatively impacted Windows 11's power performance on certain PCs, thereby improving battery life for NPU-equipped laptops.
  • Security Enhancements: Security improvements to WinSqlite3.dll.
  • Secure Boot Certificates: Bundling of new Secure Boot certificates for eligible enterprise devices.
  • Driver Removal: Removal of specific modern drivers (agrsm64.sys, agrsm.sys, smserl64.sys, smserial.sys) due to security considerations and the availability of modern networking alternatives.

Features Rolling Out

Several new features are being gradually introduced to users with this update:

  • Share with Copilot on Taskbar: A new toggle allows users to share an app's screen with Copilot for assistance, leveraging a new Windows API. This feature supports interaction with Copilot regarding on-screen content and highlights click locations with an AI cursor. It can be managed in Settings under System > Taskbar > Taskbar behavior.
  • Recommended Section in File Explorer: A new feed within File Explorer displays recently accessed, frequently used, and recently downloaded files. This feature is compatible with Microsoft and work accounts and can be enabled via File Explorer Options.
  • Advanced Settings Consolidation: Features such as Sandbox, virtual workspaces, and Hyper-V have been moved from the Control Panel to Settings > System > Advanced Settings, centralizing their management.
  • Consistent File Explorer Dark Mode: Improvements ensure dark-themed dialogs for actions like deleting large folders, moving files, or handling error messages.
  • Full-screen Experience for Handhelds: A new gaming experience for handheld devices that hides the taskbar and other Windows features, prioritizing the Xbox app in full screen and reducing background processes. This is accessible under Settings > Gaming > Full screen experience > Xbox.
  • Improved Performance: Enhanced performance for certain games or applications that query monitors for supported modes at launch, aiming to reduce stutter on high-resolution monitors. Backlight performance for HID-compliant keyboards has also been improved.
  • QR Code Sharing: Functionality for QR code sharing has been extended beyond Wi-Fi to include website links and cloud files, and QR code functionality has been added for Mobile Hotspot.
  • Usability Tweaks: A new account manager has been added to the Start Menu, and drag-and-drop functionality for apps to the taskbar has been enabled.

User-Reported Issues and Installation Guidance

While Microsoft has not identified any new issues with KB5074109 (though an unpatched bug from August 2025 regarding a hidden password icon on the lock screen persists), users have reported critical problems following installation:

  • Azure Virtual Desktop (AVD) Failure: Users have reported a fatal authentication failure (error code 0x8008005) when attempting to connect via AVD. Uninstalling the update has been cited as a temporary workaround.
  • Gaming Performance Drops: Reports indicate a decrease in gaming frame rates, with some users, particularly those with NVIDIA graphics cards, experiencing drops of approximately 20 FPS.
  • USB Formatting Bug: An issue has been observed where Windows may fail to format USB flash drives using the FAT32 file system.

"Users who rely on Azure Virtual Desktop, remote servers, or who are serious gamers are advised to consider delaying this update until Microsoft releases a patch addressing the reported critical bugs."

Given these reports, installation recommendations vary:

  • General Users: Installation is recommended for standard home users primarily focused on security, due to the extensive vulnerability patches included.
  • Professionals and Gamers: Users who rely on Azure Virtual Desktop, remote servers, or who are serious gamers are advised to consider delaying this update until Microsoft releases a patch addressing the reported critical bugs.

Future Windows 11 Developments: Version 26H2

Microsoft has confirmed that Windows 11 version 26H2 is slated for public release in late 2026, likely around October, targeting users currently on Windows 11 25H2 or 24H2. A separate version, 26H1, is being developed exclusively for new Snapdragon X2 and other ARM-based CPUs, serving as a platform update rather than a feature update for existing 25H2 users. The company reiterated its annual feature update cadence, with releases occurring in the second half of the calendar year.

The existence of Windows 11 26H2 was indicated on January 27, 2026, with the release of Windows 11 Build 26300.7674 to Windows Insiders, which included references to a "Windows 11 26H2 enablement package." Microsoft has acknowledged testing "behind-the-scenes platform changes" with Insiders.

Anticipated Features for Windows 11 in 2026

Upcoming functionalities expected in Windows 11 include:

  • Copilot in File Explorer: Integration of Copilot within File Explorer, allowing interaction in a side pane, similar to the existing Details and Preview panes. This feature will be optional.
  • Ask Copilot on the Taskbar: A new Windows Search experience powered by Copilot, which will replace the standard Windows Search UI. This feature will also be optional and not enabled by default.
  • Agenda View in Notifications Center: Reintroduction of the Agenda View with Outlook integration and Copilot capabilities. This implementation is expected to be WebView2-based.
  • Modern Run Dialog: An optional, modernized WinUI-based Run dialog that aligns with Windows 11's aesthetic, featuring the Mica effect. It is anticipated to include new functionalities beyond its updated interface.
  • Other Enhancements: Additional changes are expected to include support for .webp images as desktop backgrounds.