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Windows says i can shrink the space. Should i use their option or is that too risky also will this change allow me to run ubuntu alongside of windows?

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Use the shrink option. It works fine. Leave space for windows, too. It will need it for updates. Then, use the disk to install Ubuntu in the free space. You can also create an extended partition with a linux primary partition and swap primary partition inside it. Then create an ext3 file system. Then install Ubuntu. That shrink space is about 400 GB. You need about 20 GB for Ubuntu. You can probably get away with 100 GB of shrink space. Windows updates are huge.