diff --git a/.drone.jsonnet b/.drone.jsonnet
index 85b06a378..3f48ab2c6 100644
--- a/.drone.jsonnet
+++ b/.drone.jsonnet
@@ -360,7 +360,7 @@ local integration_provision_tests_track_2 = Step("provision-tests-track-2", priv
 
 local integration_gvisor = Step("e2e-gvisor", target="e2e-qemu", privileged=true, depends_on=[load_artifacts], environment={
         "SHORT_INTEGRATION_TEST": "yes",
-        "WITH_CONFIG_PATCH": '[{"op":"add","path":"/machine/install/extensions","value":[{"image":"ghcr.io/talos-systems/gvisor:933cdb8"}]},{"op":"add","path":"/machine/sysctls","value":{"user.max_user_namespaces": "11255"}}]',
+        "WITH_CONFIG_PATCH": '[{"op":"add","path":"/machine/install/extensions","value":[{"image":"ghcr.io/talos-systems/gvisor:54b831d"},{"image":"ghcr.io/talos-systems/intel-ucode:54b831d"}]},{"op":"add","path":"/machine/sysctls","value":{"user.max_user_namespaces": "11255"}}]',
         "WITH_TEST": "run_gvisor_test",
         "IMAGE_REGISTRY": local_registry,
 });
diff --git a/cmd/installer/pkg/install/extensions.go b/cmd/installer/pkg/install/extensions.go
index 313726b03..61469e526 100644
--- a/cmd/installer/pkg/install/extensions.go
+++ b/cmd/installer/pkg/install/extensions.go
@@ -7,6 +7,7 @@ package install
 import (
 	"bytes"
 	"fmt"
+	"io"
 	"log"
 	"os"
 	"os/exec"
@@ -107,7 +108,7 @@ func compressExtensions(extensions []*extensions.Extension, tempDir string) (*ex
 	log.Printf("compressing system extensions")
 
 	for _, ext := range extensions {
-		path, err := ext.Compress(tempDir)
+		path, err := ext.Compress(tempDir, tempDir)
 		if err != nil {
 			return nil, fmt.Errorf("error compressing extension %q: %w", ext.Manifest.Metadata.Name, err)
 		}
@@ -121,41 +122,80 @@ func compressExtensions(extensions []*extensions.Extension, tempDir string) (*ex
 	return cfg, nil
 }
 
+func buildContents(path string) (io.Reader, error) {
+	var listing bytes.Buffer
+
+	if err := buildContentsRecursive(path, "", &listing); err != nil {
+		return nil, err
+	}
+
+	return &listing, nil
+}
+
+func buildContentsRecursive(basePath, path string, w io.Writer) error {
+	if path != "" {
+		fmt.Fprintf(w, "%s\n", path)
+	}
+
+	st, err := os.Stat(filepath.Join(basePath, path))
+	if err != nil {
+		return err
+	}
+
+	if !st.IsDir() {
+		return nil
+	}
+
+	contents, err := os.ReadDir(filepath.Join(basePath, path))
+	if err != nil {
+		return err
+	}
+
+	for _, item := range contents {
+		if err = buildContentsRecursive(basePath, filepath.Join(path, item.Name()), w); err != nil {
+			return err
+		}
+	}
+
+	return nil
+}
+
 func (i *Installer) rebuildInitramfs(tempDir string) error {
 	initramfsAsset := fmt.Sprintf(constants.InitramfsAssetPath, i.options.Arch)
 
-	log.Printf("creating system extensions initramfs archive")
+	log.Printf("creating system extensions initramfs archive and compressing it")
 
-	contents, err := os.ReadDir(tempDir)
+	// the code below runs the equivalent of:
+	//   find $tempDir -print | cpio -H newc --create --reproducible | xz -v -C crc32 -0 -e -T 0 -z
+
+	listing, err := buildContents(tempDir)
 	if err != nil {
 		return err
 	}
 
-	var listing bytes.Buffer
-
-	for _, item := range contents {
-		fmt.Fprintf(&listing, "%s\n", item.Name())
+	pipeR, pipeW, err := os.Pipe()
+	if err != nil {
+		return err
 	}
 
+	defer pipeR.Close() //nolint:errcheck
+	defer pipeW.Close() //nolint:errcheck
+
 	// build cpio image which contains .sqsh images and extensions.yaml
-	cmd := exec.Command("cpio", "-H", "newc", "--create", "--reproducible", "-F", "initramfs.sysext")
-	cmd.Dir = tempDir
-	cmd.Stdin = &listing
-	cmd.Stderr = os.Stderr
+	cmd1 := exec.Command("cpio", "-H", "newc", "--create", "--reproducible")
+	cmd1.Dir = tempDir
+	cmd1.Stdin = listing
+	cmd1.Stdout = pipeW
+	cmd1.Stderr = os.Stderr
 
-	if err = cmd.Run(); err != nil {
+	if err = cmd1.Start(); err != nil {
 		return err
 	}
 
-	log.Printf("compressing system extensions initramfs archive")
-
-	source, err := os.OpenFile(filepath.Join(tempDir, "initramfs.sysext"), os.O_RDONLY, 0)
-	if err != nil {
+	if err = pipeW.Close(); err != nil {
 		return err
 	}
 
-	defer source.Close() //nolint:errcheck
-
 	destination, err := os.OpenFile(initramfsAsset, os.O_APPEND|os.O_WRONLY, 0)
 	if err != nil {
 		return err
@@ -164,15 +204,35 @@ func (i *Installer) rebuildInitramfs(tempDir string) error {
 	defer destination.Close() //nolint:errcheck
 
 	// append compressed initramfs.sysext to the original initramfs.xz, kernel can read such format
-	cmd = exec.Command("xz", "-v", "-C", "crc32", "-0", "-e", "-T", "0", "-z")
-	cmd.Dir = tempDir
-	cmd.Stdin = source
-	cmd.Stdout = destination
-	cmd.Stderr = os.Stderr
+	cmd2 := exec.Command("xz", "-v", "-C", "crc32", "-0", "-e", "-T", "0", "-z")
+	cmd2.Dir = tempDir
+	cmd2.Stdin = pipeR
+	cmd2.Stdout = destination
+	cmd2.Stderr = os.Stderr
 
-	if err = cmd.Run(); err != nil {
+	if err = cmd2.Start(); err != nil {
 		return err
 	}
 
-	return nil
+	if err = pipeR.Close(); err != nil {
+		return err
+	}
+
+	errCh := make(chan error, 1)
+
+	go func() {
+		errCh <- cmd1.Wait()
+	}()
+
+	go func() {
+		errCh <- cmd2.Wait()
+	}()
+
+	for i := 0; i < 2; i++ {
+		if err = <-errCh; err != nil {
+			return err
+		}
+	}
+
+	return destination.Sync()
 }
diff --git a/internal/pkg/extensions/compress.go b/internal/pkg/extensions/compress.go
index 034554ea1..a2f5852e9 100644
--- a/internal/pkg/extensions/compress.go
+++ b/internal/pkg/extensions/compress.go
@@ -6,17 +6,91 @@ package extensions
 
 import (
 	"fmt"
+	"io"
+	"io/fs"
 	"os"
 	"os/exec"
 	"path/filepath"
+
+	"github.com/talos-systems/talos/pkg/machinery/constants"
 )
 
-// Compress builds the squashfs image in the specified destination folder.
-func (ext *Extension) Compress(destinationPath string) (string, error) {
-	destinationPath = filepath.Join(destinationPath, fmt.Sprintf("%s.sqsh", ext.directory))
+// List of paths to be moved to the future initramfs.
+var initramfsPaths = []string{
+	constants.FirmwarePath,
+}
 
-	cmd := exec.Command("mksquashfs", ext.rootfsPath, destinationPath, "-all-root", "-noappend", "-comp", "xz", "-Xdict-size", "100%", "-no-progress")
+// Compress builds the squashfs image in the specified destination folder.
+//
+// Components which should be placed to the initramfs are moved to the initramfsPath.
+func (ext *Extension) Compress(squashPath, initramfsPath string) (string, error) {
+	for _, path := range initramfsPaths {
+		if _, err := os.Stat(filepath.Join(ext.rootfsPath, path)); err == nil {
+			if err = moveFiles(filepath.Join(ext.rootfsPath, path), filepath.Join(initramfsPath, path)); err != nil {
+				return "", err
+			}
+		}
+	}
+
+	squashPath = filepath.Join(squashPath, fmt.Sprintf("%s.sqsh", ext.directory))
+
+	cmd := exec.Command("mksquashfs", ext.rootfsPath, squashPath, "-all-root", "-noappend", "-comp", "xz", "-Xdict-size", "100%", "-no-progress")
 	cmd.Stderr = os.Stderr
 
-	return destinationPath, cmd.Run()
+	return squashPath, cmd.Run()
+}
+
+func moveFiles(srcPath, dstPath string) error {
+	st, err := os.Stat(srcPath)
+	if err != nil {
+		return err
+	}
+
+	if st.IsDir() {
+		return moveDirectory(st, srcPath, dstPath)
+	}
+
+	return moveFile(st, srcPath, dstPath)
+}
+
+func moveFile(st fs.FileInfo, srcPath, dstPath string) error {
+	src, err := os.Open(srcPath)
+	if err != nil {
+		return err
+	}
+
+	defer src.Close() //nolint:errcheck
+
+	dst, err := os.OpenFile(dstPath, os.O_CREATE|os.O_WRONLY, st.Mode().Perm())
+	if err != nil {
+		return err
+	}
+
+	defer dst.Close() //nolint:errcheck
+
+	_, err = io.Copy(dst, src)
+	if err != nil {
+		return err
+	}
+
+	return os.Remove(srcPath)
+}
+
+func moveDirectory(st fs.FileInfo, srcPath, dstPath string) error {
+	if err := os.MkdirAll(dstPath, st.Mode().Perm()); err != nil {
+		return err
+	}
+
+	contents, err := os.ReadDir(srcPath)
+	if err != nil {
+		return err
+	}
+
+	for _, item := range contents {
+		if err = moveFiles(filepath.Join(srcPath, item.Name()), filepath.Join(dstPath, item.Name())); err != nil {
+			return err
+		}
+	}
+
+	return os.Remove(srcPath)
 }
diff --git a/internal/pkg/extensions/extensions_test.go b/internal/pkg/extensions/extensions_test.go
index 2bf3a3b86..8296a8422 100644
--- a/internal/pkg/extensions/extensions_test.go
+++ b/internal/pkg/extensions/extensions_test.go
@@ -5,6 +5,7 @@
 package extensions_test
 
 import (
+	"os/exec"
 	"path/filepath"
 	"testing"
 
@@ -15,7 +16,7 @@ import (
 	"github.com/talos-systems/talos/pkg/version"
 )
 
-func TestLoadValidateCompress(t *testing.T) {
+func TestLoadValidate(t *testing.T) {
 	ext, err := extensions.Load("testdata/good/extension1")
 	require.NoError(t, err)
 
@@ -30,11 +31,23 @@ func TestLoadValidateCompress(t *testing.T) {
 	})
 
 	assert.NoError(t, ext.Validate())
+}
 
-	dest := t.TempDir()
-	_, err = ext.Compress(dest)
+func TestCompress(t *testing.T) {
+	// Compress is going to change contents of the extension, copy to some temporary directory
+	extDir := t.TempDir()
 
+	require.NoError(t, exec.Command("cp", "-r", "testdata/good/extension1", extDir).Run())
+
+	ext, err := extensions.Load(filepath.Join(extDir, "extension1"))
+	require.NoError(t, err)
+
+	squashDest, initramfsDest := t.TempDir(), t.TempDir()
+	squashFile, err := ext.Compress(squashDest, initramfsDest)
 	assert.NoError(t, err)
+
+	assert.FileExists(t, squashFile)
+	assert.FileExists(t, filepath.Join(initramfsDest, "lib", "firmware", "amd", "cpu"))
 }
 
 func TestValidateFailures(t *testing.T) {
diff --git a/internal/pkg/extensions/pull.go b/internal/pkg/extensions/pull.go
index 422f61c9d..a853fc2fb 100644
--- a/internal/pkg/extensions/pull.go
+++ b/internal/pkg/extensions/pull.go
@@ -77,7 +77,7 @@ func (puller *Puller) PullAndMount(ctx context.Context, registryConfig config.Re
 			return err
 		}
 
-		mounts, err := snapshotService.View(ctx, path, chainID.String())
+		mounts, err := snapshotService.Prepare(ctx, path, chainID.String())
 		if err != nil {
 			return err
 		}