GraalVM is a high-performance, polyglot VM that can run programs in different languages. It addresses issues with the JVM like performance, startup times, updates, and legacy code. GraalVM uses an optimizing compiler called Graal that can make programs 2-5 times faster than the default C2 compiler through optimizations like inlining and partial escape analysis. Programs can also be compiled to native using SubstrateVM for faster startup times and lower memory footprint, but with less dynamic behavior. Quarkus addresses this by allowing the use of JVM frameworks like Spring and Hibernate within a GraalVM native environment.