diff --git a/.bazelrc b/.bazelrc
index 194508b9cf..96cf152223 100644
--- a/.bazelrc
+++ b/.bazelrc
@@ -250,11 +250,11 @@ build:windows --action_env OpenCV_DIR="c:/opt/opencv"
 
 build:windows --repo_env=HERMETIC_PYTHON_VERSION=3.11
 build:windows --define=USE_DROGON=1
-build:windows --define=GENAI_USE_BINARY=1
+build:windows --define=GENAI_USE_BINARY=0
 
 # Tests settings ############################################################################################################################
 # sometimes failed logs exceed this threshold
-test --experimental_ui_max_stdouterr_bytes=104857600
+test --experimental_ui_max_stdouterr_bytes=304857600
 
 # envs below are required to succesfully run binaries in bazel as bazel is very strict in sandboxing
 test:linux --test_env LD_LIBRARY_PATH=/opt/opencv/lib/:/opt/intel/openvino/runtime/lib/intel64/:/opt/intel/openvino/runtime/3rdparty/tbb/lib/
diff --git a/third_party/llm_engine/llm_engine.bzl b/third_party/llm_engine/llm_engine.bzl
index dfb82fef2a..58882037b2 100644
--- a/third_party/llm_engine/llm_engine.bzl
+++ b/third_party/llm_engine/llm_engine.bzl
@@ -23,8 +23,8 @@ def llm_engine():
     llm_engine_repository(name="_llm_engine")
     new_git_repository(
         name = "llm_engine",
-        remote = "https://github.com/openvinotoolkit/openvino.genai",
-        commit = "3ce470c851aea7c0d9743bcd7d0d401954611a69", # releases/2025/1 2025-03-20
+        remote = "https://github.com/mzegla/openvino.genai",
+        commit = "da1497e2087c7e11af89faab854b412c7594ed63", # based on releases/2025/1, commit with VLM fixes for serving, 2025-03-26
         build_file = "@_llm_engine//:BUILD",
         init_submodules = True,
         recursive_init_submodules = True,
@@ -66,6 +66,7 @@ def _impl(repository_ctx):
         "WIN32": "True",
         "X86_64": "True"
         """
+        jobs_param = "\" -j 8\"" # on Windows we do not need to specify number of jobs, it's set to all available cores number
     else:
         lib_name = "libopenvino_genai"
         out_dll_dir_win = ""
@@ -79,6 +80,7 @@ def _impl(repository_ctx):
         "CMAKE_ARCHIVE_OUTPUT_DIRECTORY": "lib",
         "ENABLE_SYSTEM_ICU": "True",
         """
+        jobs_param = "\"-j 8\"" # on Linux we need to specify jobs number, by default it's set to 1
 
     # Note we need to escape '{/}' by doubling them due to call to format
     build_file_content = """
@@ -112,7 +114,7 @@ cmake(
         "--",  # <- Pass remaining options to the native tool.
         # https://github.com/bazelbuild/rules_foreign_cc/issues/329
         # there is no elegant parallel compilation support - lets go with default - CORES + 2 for ninja
-        "-j 8",
+        {jobs_param}
     ],
     cache_entries = {{ 
         {cache_entries}
@@ -154,7 +156,8 @@ cc_library(
 )
 """
     repository_ctx.file("BUILD", build_file_content.format(OpenVINO_DIR=OpenVINO_DIR, http_proxy=http_proxy, https_proxy=https_proxy,
-                                                            out_dll_dir_win=out_dll_dir_win, out_lib_dir=out_lib_dir, lib_name=lib_name, out_libs=out_libs, cache_entries=cache_entries, out_static=out_static))
+                                                            out_dll_dir_win=out_dll_dir_win, out_lib_dir=out_lib_dir, lib_name=lib_name, out_libs=out_libs, cache_entries=cache_entries, out_static=out_static,
+                                                            jobs_param=jobs_param))
 
 llm_engine_repository = repository_rule(
     implementation = _impl,
diff --git a/windows_install_build_dependencies.bat b/windows_install_build_dependencies.bat
index c7d593d1d5..b3b019a146 100644
--- a/windows_install_build_dependencies.bat
+++ b/windows_install_build_dependencies.bat
@@ -124,54 +124,65 @@ IF /I EXIST %bash_path% (
 
 :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
 ::::::::::::::::::::::: GENAI/OPENVINO - reinstalled per build trigger
-set "genai_dir=openvino_genai_windows_2025.1.0.0rc2_x86_64"
-set "genai_ver=openvino_genai_windows_2025.1.0.0rc2_x86_64.zip"
-set "genai_http=https://storage.openvinotoolkit.org/repositories/openvino_genai/packages/pre-release/2025.1.0.0rc2/"
 
-set "genai_zip=%BAZEL_SHORT_PATH%\%genai_ver%"
-set "genai_workspace=C:\\\\opt\\\\openvino\\\\runtime"
-set "genai_new_workspace=C:\\%output_user_root%\\openvino\\runtime"
+:: For now we build GenAI from source
 
-echo [INFO] Installing GenAI: %genai_dir% ...
-:: Download GenAi
-IF /I EXIST %genai_zip% (
+::set "genai_dir=openvino_genai_windows_2025.1.0.0rc2_x86_64"
+::set "genai_ver=openvino_genai_windows_2025.1.0.0rc2_x86_64.zip"
+::set "genai_http=https://storage.openvinotoolkit.org/repositories/openvino_genai/packages/pre-release/2025.1.0.0rc2/"
+
+::set "genai_zip=%BAZEL_SHORT_PATH%\%genai_ver%"
+::set "genai_workspace=C:\\\\opt\\\\openvino\\\\runtime"
+::set "genai_new_workspace=C:\\%output_user_root%\\openvino\\runtime"
+
+set "openvino_dir=openvino_toolkit_windows_2025.1.0.dev20250320_x86_64"
+set "openvino_ver=openvino_toolkit_windows_2025.1.0.dev20250320_x86_64.zip"
+set "openvino_http=https://storage.openvinotoolkit.org/repositories/openvino/packages/pre-release/2025.1.0rc2/"
+
+set "openvino_zip=%BAZEL_SHORT_PATH%\%openvino_ver%"
+set "openvino_workspace=C:\\\\opt\\\\openvino\\\\runtime"
+set "openvino_new_workspace=C:\\%output_user_root%\\openvino\\runtime"
+
+echo [INFO] Installing OpenVINO: %openvino_dir% ...
+ :: Download OpenVINO
+ IF /I EXIST %openvino_zip% (
     if %expunge% EQU 1 (
-        del /S /Q %genai_zip%
+        del /S /Q %openvino_zip%
         if !errorlevel! neq 0 exit /b !errorlevel!
-        %wget_path% -P %BAZEL_SHORT_PATH%\ %genai_http%%genai_ver%
+        %wget_path% -P %BAZEL_SHORT_PATH%\ %openvino_http%%openvino_ver%
         if !errorlevel! neq 0 exit /b !errorlevel!
-    ) else ( echo [INFO] file exists %genai_zip% )
+    ) else ( echo [INFO] file exists %openvino_zip% )
     
 ) ELSE (
-    %wget_path% -P %BAZEL_SHORT_PATH%\ %genai_http%%genai_ver%
+    %wget_path% -P %BAZEL_SHORT_PATH%\ %openvino_http%%openvino_ver%
     if !errorlevel! neq 0 exit /b !errorlevel!
 )
-:: Extract GenAi
-IF /I EXIST %BAZEL_SHORT_PATH%\%genai_dir% (
+:: Extract OpenVINO
+IF /I EXIST %BAZEL_SHORT_PATH%\%openvino_dir% (
      if %expunge% EQU 1 (
-        rmdir /S /Q %BAZEL_SHORT_PATH%\%genai_dir%
+        rmdir /S /Q %BAZEL_SHORT_PATH%\%openvino_dir%
         if !errorlevel! neq 0 exit /b !errorlevel!
-        C:\Windows\System32\tar.exe -xf "%genai_zip%" -C %BAZEL_SHORT_PATH%
+        C:\Windows\System32\tar.exe -xf "%openvino_zip%" -C %BAZEL_SHORT_PATH%
         if !errorlevel! neq 0 exit /b !errorlevel!
-    ) else ( echo [INFO] directory exists %BAZEL_SHORT_PATH%\%genai_dir% )
+    ) else ( echo [INFO] directory exists %BAZEL_SHORT_PATH%\%openvino_dir% )
     
 ) ELSE (
-    C:\Windows\System32\tar.exe -xf "%genai_zip%" -C %BAZEL_SHORT_PATH%
+    C:\Windows\System32\tar.exe -xf "%openvino_zip%" -C %BAZEL_SHORT_PATH%
     if !errorlevel! neq 0 exit /b !errorlevel!
 )
-:: Create GenAi link - always to make sure it points to latest version
+:: Create OpenVINO link - always to make sure it points to latest version
 IF /I EXIST %BAZEL_SHORT_PATH%\openvino (
     rmdir /S /Q %BAZEL_SHORT_PATH%\openvino
 )
-mklink /d %BAZEL_SHORT_PATH%\openvino %BAZEL_SHORT_PATH%\%genai_dir%
+mklink /d %BAZEL_SHORT_PATH%\openvino %BAZEL_SHORT_PATH%\%openvino_dir%
 if !errorlevel! neq 0 exit /b !errorlevel!
 
-:: Replace path to GenAi in ovms WORKSPACE file
+:: Replace path to OpenVINO in ovms WORKSPACE file
 if "!output_user_root!" neq "opt" (
-    powershell -Command "(gc -Path WORKSPACE) -replace '%genai_workspace%', '%genai_new_workspace%' | Set-Content -Path WORKSPACE"
+    powershell -Command "(gc -Path WORKSPACE) -replace '%openvino_workspace%', '%openvino_new_workspace%' | Set-Content -Path WORKSPACE"
     if !errorlevel! neq 0 exit /b !errorlevel!
 )
-echo [INFO] GenAi installed: %BAZEL_SHORT_PATH%\%genai_dir%
+echo [INFO] OpenVINO installed: %BAZEL_SHORT_PATH%\%openvino_dir%
 
 :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
 ::::::::::::::::::::::: OpenCL headers