diff --git a/src/hotspot/share/opto/loopnode.cpp b/src/hotspot/share/opto/loopnode.cpp
index 5e00270402e..6cb50b3dee2 100644
--- a/src/hotspot/share/opto/loopnode.cpp
+++ b/src/hotspot/share/opto/loopnode.cpp
@@ -692,14 +692,24 @@ SafePointNode* PhaseIdealLoop::find_safepoint(Node* back_control, Node* x, Ideal
 
     // We can only use that safepoint if there's no side effect between the backedge and the safepoint.
 
-    // mm is used for book keeping
+    // mm is the memory state at the safepoint (when it's a MergeMem)
+    // no_side_effect_since_safepoint() goes over the memory state at the backedge. It resets the mm input for each
+    // component of the memory state it encounters so it points to the base memory. Once no_side_effect_since_safepoint()
+    // is done, if no side effect after the safepoint was found, mm should transform to the base memory: the states at
+    // the backedge and safepoint are the same so all components of the memory state at the safepoint should have been
+    // reset.
     MergeMemNode* mm = nullptr;
 #ifdef ASSERT
     if (mem->is_MergeMem()) {
       mm = mem->clone()->as_MergeMem();
       _igvn._worklist.push(mm);
       for (MergeMemStream mms(mem->as_MergeMem()); mms.next_non_empty(); ) {
-        if (mms.alias_idx() != Compile::AliasIdxBot && loop != get_loop(ctrl_or_self(mms.memory()))) {
+        // Loop invariant memory state won't be reset by no_side_effect_since_safepoint(). Do it here.
+        // Escape Analysis can add state to mm that it doesn't add to the backedge memory Phis, breaking verification
+        // code that relies on mm. Clear that extra state here.
+        if (mms.alias_idx() != Compile::AliasIdxBot &&
+            (loop != get_loop(ctrl_or_self(mms.memory())) ||
+             (mms.adr_type()->isa_oop_ptr() && mms.adr_type()->is_known_instance()))) {
           mm->set_memory_at(mms.alias_idx(), mem->as_MergeMem()->base_memory());
         }
       }
diff --git a/test/hotspot/jtreg/compiler/longcountedloops/TestSafePointWithEAState.java b/test/hotspot/jtreg/compiler/longcountedloops/TestSafePointWithEAState.java
new file mode 100644
index 00000000000..a04af09570f
--- /dev/null
+++ b/test/hotspot/jtreg/compiler/longcountedloops/TestSafePointWithEAState.java
@@ -0,0 +1,63 @@
+/*
+ * Copyright (c) 2024, Red Hat, Inc. All rights reserved.
+ * DO NOT ALTER OR REMOVE COPYRIGHT NOTICES OR THIS FILE HEADER.
+ *
+ * This code is free software; you can redistribute it and/or modify it
+ * under the terms of the GNU General Public License version 2 only, as
+ * published by the Free Software Foundation.
+ *
+ * This code is distributed in the hope that it will be useful, but WITHOUT
+ * ANY WARRANTY; without even the implied warranty of MERCHANTABILITY or
+ * FITNESS FOR A PARTICULAR PURPOSE.  See the GNU General Public License
+ * version 2 for more details (a copy is included in the LICENSE file that
+ * accompanied this code).
+ *
+ * You should have received a copy of the GNU General Public License version
+ * 2 along with this work; if not, write to the Free Software Foundation,
+ * Inc., 51 Franklin St, Fifth Floor, Boston, MA 02110-1301 USA.
+ *
+ * Please contact Oracle, 500 Oracle Parkway, Redwood Shores, CA 94065 USA
+ * or visit www.oracle.com if you need additional information or have any
+ * questions.
+ */
+
+/**
+ * @test
+ * @bug 8336702
+ * @summary C2 compilation fails with "all memory state should have been processed" assert
+ *
+ * @run main/othervm TestSafePointWithEAState
+ *
+ */
+
+public class TestSafePointWithEAState {
+    int[] b = new int[400];
+
+    void c() {
+        int e;
+        float f;
+        for (long d = 0; d < 5000; d++) {
+            e = 1;
+            while ((e += 3) < 200) {
+                if (d < b.length) {
+                    for (int g = 0; g < 10000; ++g) ;
+                }
+            }
+            synchronized (TestSafePointWithEAState.class) {
+                f = new h(e).n;
+            }
+        }
+    }
+
+    public static void main(String[] m) {
+        TestSafePointWithEAState o = new TestSafePointWithEAState();
+        o.c();
+    }
+}
+
+class h {
+    float n;
+    h(float n) {
+        this.n = n;
+    }
+}