diff --git a/pkg/daemon/daemon.go b/pkg/daemon/daemon.go
index 8247a123e0..910b6fe824 100644
--- a/pkg/daemon/daemon.go
+++ b/pkg/daemon/daemon.go
@@ -1054,6 +1054,13 @@ func (dn *Daemon) RunFirstbootCompleteMachineconfig() error {
 	// it, reflecting the current machine state.
 	oldConfig := canonicalizeEmptyMC(nil)
 	oldConfig.Spec.OSImageURL = dn.bootedOSImageURL
+
+	// Setting the Kernel Arguments is for comparison with the desired MachineConfig.
+	// The resulting MC should not be used as the actual running configuration.
+	if err = setRunningKargs(oldConfig, mc.Spec.KernelArguments); err != nil {
+		return fmt.Errorf("failed to set kernel arguments from /proc/cmdline: %w", err)
+	}
+
 	// Currently, we generally expect the bootimage to be older, but in the special
 	// case of having bootimage == machine-os-content, and no kernel arguments
 	// specified, then we don't need to do anything here.
diff --git a/pkg/daemon/update.go b/pkg/daemon/update.go
index 53b2eb36e8..ea1ab97018 100644
--- a/pkg/daemon/update.go
+++ b/pkg/daemon/update.go
@@ -122,6 +122,25 @@ func (dn *Daemon) performPostConfigChangeAction(postConfigChangeActions []string
 	return dn.triggerUpdateWithMachineConfig(state.currentConfig, state.desiredConfig, true)
 }
 
+func setRunningKargs(config *mcfgv1.MachineConfig, requestedKargs []string) error {
+	b, err := os.ReadFile("/proc/cmdline")
+	if err != nil {
+		return err
+	}
+	splits := strings.Split(strings.TrimSpace(string(b)), " ")
+	config.Spec.KernelArguments = nil
+	for _, split := range splits {
+		for _, reqKarg := range requestedKargs {
+			if strings.ReplaceAll(reqKarg, "\"", "") == strings.ReplaceAll(split, "\"", "") {
+				config.Spec.KernelArguments = append(config.Spec.KernelArguments, reqKarg)
+				break
+			}
+		}
+	}
+	logSystem("requested kargs: %+v, merged kargs: %+v", requestedKargs, config.Spec.KernelArguments)
+	return nil
+}
+
 func canonicalizeEmptyMC(config *mcfgv1.MachineConfig) *mcfgv1.MachineConfig {
 	if config != nil {
 		return config