i915 graphics driver does not work on 16.10

16.04 works great on this laptop!

The 16.10 install image boots fine, but once you install it the i915 graphics driver doesn't seem to attach to the device. I tried many things, but I couldn't get it working. Even running the kernel from 16.04 made no difference.

On 16.04 lshw has:
        *-display
             description: VGA compatible controller
             product: Sky Lake Integrated Graphics
             vendor: Intel Corporation
             physical id: 2
             bus info: pci@0000:00:02.0
             version: 07
             width: 64 bits
             clock: 33MHz
             capabilities: pciexpress msi pm vga_controller bus_master cap_list rom
             configuration: driver=i915 latency=0
             resources: irq:127 memory:f0000000-f0ffffff memory:e0000000-efffffff ioport:e000(size=64) memory:c0000-dffff

But if I boot into safe mode on 16.10 the description is missing and X will not start.