Using limits, you can specify the maximum amount of resources a VM can use. If the limit is not set, a VM will consume up to the maximum amount of resources based on its configuration and the virtual hardware used. If a VM is configured with a limit, although it has some resources configured, it will never use more than specified by the limit. The default limit value is set to unlimited.

For example, you have a VM with 16 vCPUs, each running at 2.4 GHz, giving you a total of 38.4 GHz of computing resources, but you might want to configure the VM in a way that it will never consume more than 4.8 GHz of computing resources. From the guest OS perspective, it will have 16 CPUs, each running at 2.4 GHz.