A VDI file is a Virtual Disk Image file format used by Oracle's VirtualBox virtualization software. It contains the entire contents of a virtual hard disk, including the operating system, installed programs, user data, and any other files stored on the virtual machine. Think of it as a container that holds all the information needed to run a virtual machine. The VDI format allows users to create, store, and manage virtual machines on their physical computers. These files are essential for running different operating systems or software environments without directly affecting the host system. They are also useful for testing software, creating backups of entire systems, and running legacy applications. VDI files can be dynamically allocated, meaning they only take up the space they need on the host drive, or they can be fixed-size, allocating the entire specified size upfront. This format is specific to VirtualBox and offers features like snapshots, which allow users to revert to previous states of the virtual machine.