A physical GPU that is passed through to a VM is bound to the vfio-pci kernel module. A physical GPU that is bound to the vfio-pci kernel module can be used only for pass-through. To enable the GPU to be used for vGPU, the GPU must be unbound from vfio-pci kernel module and bound to the nvidia kernel module.
#? lspci -d 10de: -k
b1:00.0 3D controller: NVIDIA Corporation Device 1db4 (rev a1)