Hi ,
Thanks for reaching out to Microsoft Q&A.
The error code 0x80240438 with the message "Windows update API failed to assess the machine for available updates" typically indicates that your Azure VM cannot reach the Windows Update service endpoints when azure update manager (or Update Management) runs its assessment. Manual updates work because you are initiating them interactively, but the assessment runs under system context and depends on proper outbound connectivity. The most common causes are blocked outbound access in NSGs or firewalls, missing proxy configuration, or restricted internet access due to private networking. To fix this, ensure the VM can reach Windows Update endpoints such as *.windowsupdate.com, *.update.microsoft.com, and *.delivery.mp.microsoft.com over ports 80 and 443. If the VM is in a private subnet without internet, you will need to configure an outbound proxy or use azure update manager private endpoints. Once network connectivity to the update service endpoints is available, the assessment should succeed.
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