diff --git a/README.md b/README.md
index e9f0aaefb..268d5a752 100644
--- a/README.md
+++ b/README.md
@@ -375,7 +375,14 @@ dataset_shard_idx:
 sequence_len: 2048
 # max sequence length to concatenate training samples together up to
 # inspired by StackLLaMA. see https://huggingface.co/blog/stackllama#supervised-fine-tuning
+# FutureWarning: This will soon be DEPRECATED
 max_packed_sequence_len: 1024
+# use efficient multi-packing with block diagonal attention and per sequence position_ids. Recommend set to 'true'
+sample_packing:
+# you can set these packing optimizations AFTER starting a training at least once.
+# The trainer will provide recommended values for these values.
+sample_packing_eff_est:
+total_num_tokens:
 
 # if you want to use 'lora' or 'qlora' or leave blank to train all parameters in original model
 adapter: lora
@@ -421,6 +428,7 @@ learning_rate: 0.00003
 logging_steps:
 save_steps:
 eval_steps:
+save_total_limit:
 
 # save model as safetensors (require safetensors package)
 save_safetensors:
@@ -534,7 +542,7 @@ accelerate launch scripts/finetune.py configs/your_config.yml
 
 #### Multi-GPU
 
-It is recommended to pre-tokenize dataset with the following before finetuning:
+You can optionally pre-tokenize dataset with the following before finetuning:
 ```bash
 CUDA_VISIBLE_DEVICES="" accelerate ... --prepare_ds_only
 ```
diff --git a/requirements.txt b/requirements.txt
index 33bfb94a8..ae4eca8f3 100644
--- a/requirements.txt
+++ b/requirements.txt
@@ -13,6 +13,8 @@ einops
 xformers
 optimum
 hf_transfer
+numba
+numpy==1.24.4
 # qlora things
 bert-score==0.3.13
 evaluate==0.4.0
diff --git a/scripts/finetune.py b/scripts/finetune.py
index e6fea4456..a7fee5ec8 100644
--- a/scripts/finetune.py
+++ b/scripts/finetune.py
@@ -21,9 +21,14 @@ from axolotl.logging_config import configure_logging
 from axolotl.utils.bench import log_gpu_memory_usage
 from axolotl.utils.data import load_prepare_datasets, load_pretraining_dataset
 from axolotl.utils.dict import DictDefault
+from axolotl.utils.distributed import barrier, is_main_process
 from axolotl.utils.models import load_model, load_tokenizer
 from axolotl.utils.tokenization import check_dataset_labels
-from axolotl.utils.trainer import setup_trainer
+from axolotl.utils.trainer import (
+    calculate_total_num_steps,
+    process_datasets_for_packing,
+    setup_trainer,
+)
 from axolotl.utils.validation import validate_config
 from axolotl.utils.wandb import setup_wandb_env_vars
 
@@ -232,12 +237,25 @@ def train(
                 cfg.pretraining_dataset,
                 tokenizer,
                 max_tokens=cfg.sequence_len,
-                seed=cfg.seed,
+                seed=cfg.seed or 42,
             )
             # https://discuss.huggingface.co/t/how-to-use-huggingface-trainer-streaming-datasets-without-wrapping-it-with-torchdatas-iterablewrapper/25230
             train_dataset = train_dataset.with_format("torch")
             eval_dataset = None
 
+        if is_main_process():
+            # process on rank 0 first so it gets cached so other ranks load from cache
+            train_dataset, eval_dataset = process_datasets_for_packing(
+                cfg, train_dataset, eval_dataset
+            )
+        barrier()
+        if not is_main_process():
+            train_dataset, eval_dataset = process_datasets_for_packing(
+                cfg, train_dataset, eval_dataset
+            )
+        barrier()
+        total_num_steps = calculate_total_num_steps(cfg, train_dataset, tokenizer)
+
     if cfg.debug or "debug" in kwargs:
         LOG.info("check_dataset_labels...")
         check_dataset_labels(
@@ -254,7 +272,7 @@ def train(
     log_gpu_memory_usage(LOG, "baseline", cfg.device)
 
     # Load the model and tokenizer
-    LOG.info("loading model and peft_config...")
+    LOG.info("loading model and (optionally) peft_config...")
     model, peft_config = load_model(cfg, tokenizer)
 
     safe_serialization = cfg.save_safetensors is True
@@ -288,7 +306,9 @@ def train(
         model.save_pretrained(cfg.output_dir, safe_serialization=safe_serialization)
         return
 
-    trainer = setup_trainer(cfg, train_dataset, eval_dataset, model, tokenizer)
+    trainer = setup_trainer(
+        cfg, train_dataset, eval_dataset, model, tokenizer, total_num_steps
+    )
 
     model.config.use_cache = False
 
@@ -347,14 +367,12 @@ def train(
     # TODO do we need this fix? https://huggingface.co/docs/accelerate/usage_guides/fsdp#saving-and-loading
     # only save on rank 0, otherwise it corrupts output on multi-GPU when multiple processes attempt to write the same file
     if cfg.fsdp:
-        model.save_pretrained(cfg.output_dir, safe_serialization=safe_serialization)
+        trainer.save_model(cfg.output_dir)
     elif cfg.local_rank == 0:
         if cfg.flash_optimum:
             model = BetterTransformer.reverse(model)
         model.save_pretrained(cfg.output_dir, safe_serialization=safe_serialization)
 
-    # trainer.save_model(cfg.output_dir)  # TODO this may be needed for deepspeed to work? need to review another time
-
 
 if __name__ == "__main__":
     fire.Fire(train)
diff --git a/src/axolotl/datasets.py b/src/axolotl/datasets.py
index fd82db6cb..75d8432da 100644
--- a/src/axolotl/datasets.py
+++ b/src/axolotl/datasets.py
@@ -5,7 +5,7 @@ import os
 from typing import List
 
 import torch
-from datasets import IterableDataset
+from datasets import Dataset, IterableDataset
 
 from .prompt_tokenizers import PromptTokenizingStrategy
 
@@ -18,9 +18,9 @@ from .prompt_tokenizers import PromptTokenizingStrategy
 LOG = logging.getLogger("axolotl")
 
 
-class TokenizedPromptDataset(IterableDataset):
+class TokenizedPromptDataset(Dataset):
     """
-    Iterable dataset that returns tokenized prompts from a stream of text files.
+    Dataset that returns tokenized prompts from a stream of text files.
         Args:
             prompt_tokenizer (PromptTokenizingStrategy): The prompt tokenizing method for proccessing the data.
             dataset (dataset.Dataset): Dataset with text files.
@@ -30,19 +30,18 @@ class TokenizedPromptDataset(IterableDataset):
         self,
         prompt_tokenizer: PromptTokenizingStrategy,
         dataset: IterableDataset,
+        **kwargs,
     ):
         self.prompt_tokenizer = prompt_tokenizer
-        self.dataset = dataset
+        super().__init__(self.process(dataset).data, **kwargs)
 
-    def __iter__(self):
-        features = self.dataset.features.keys()
-        num_proc = os.cpu_count()
-        return iter(
-            self.dataset.map(
-                self.prompt_tokenizer.tokenize_prompt,
-                num_proc=num_proc,
-                remove_columns=features,
-            )
+    def process(self, dataset):
+        features = dataset.features.keys()
+        num_proc = min(64, os.cpu_count())
+        return dataset.map(
+            self.prompt_tokenizer.tokenize_prompt,
+            num_proc=num_proc,
+            remove_columns=features,
         )
 
 
@@ -77,14 +76,21 @@ class ConstantLengthDataset(IterableDataset):
             self.tokens_dtype = torch.int64
 
     def __iter__(self):
-        buffer = {"input_ids": [], "attention_mask": [], "labels": []}
+        buffer = {
+            "input_ids": [],
+            "attention_mask": [],
+            "labels": [],
+            "position_ids": [],
+        }
         buffer_len = 0
         for dataset in self.datasets:
+            idx = 0
             iterator = iter(dataset)
             more_examples = True
             while more_examples:
                 try:
                     example = next(iterator)
+                    idx += 1
                 except StopIteration:
                     more_examples = False
                     example = None
@@ -106,6 +112,9 @@ class ConstantLengthDataset(IterableDataset):
                         attention_mask = torch.cat(buffer["attention_mask"], dim=-1)[
                             : self.seq_length
                         ]
+                        position_ids = torch.cat(buffer["position_ids"], dim=-1)[
+                            : self.seq_length
+                        ]
                         labels = torch.cat(buffer["labels"], dim=-1)[: self.seq_length]
                         if labels.size() == input_ids.size() and (
                             attention_mask.size() == input_ids.size()
@@ -114,6 +123,7 @@ class ConstantLengthDataset(IterableDataset):
                                 "input_ids": input_ids,
                                 "labels": labels,
                                 "attention_mask": attention_mask,
+                                "position_ids": position_ids,
                             }
                         else:
                             LOG.warning(
@@ -123,8 +133,10 @@ class ConstantLengthDataset(IterableDataset):
                         "input_ids": [],
                         "attention_mask": [],
                         "labels": [],
+                        "position_ids": [],
                     }
                     buffer_len = 0
+                    idx = 1
 
                 if example:
                     # FIXME
@@ -133,11 +145,6 @@ class ConstantLengthDataset(IterableDataset):
                         input_ids = example["input_ids"]
                         attention_mask = example["attention_mask"]
                         labels = example["labels"]
-                        if (
-                            buffer["input_ids"]
-                            and input_ids[0] == self.tokenizer.bos_token_id
-                        ):
-                            attention_mask[0] = 0
 
                         if add_concat_token:
                             input_ids.append(self.concat_token_id)
@@ -148,13 +155,17 @@ class ConstantLengthDataset(IterableDataset):
                             input_ids, dtype=self.tokens_dtype
                         )
                         attention_mask_with_concat = torch.tensor(
-                            attention_mask, dtype=self.tokens_dtype
+                            [idx * m for m in attention_mask], dtype=torch.int16
                         )
                         labels_with_concat = torch.tensor(
                             labels, dtype=self.tokens_dtype
                         )
+                        position_ids = torch.arange(
+                            len(input_ids), dtype=self.tokens_dtype
+                        )
 
                         buffer["input_ids"].append(input_ids_with_concat)
                         buffer["attention_mask"].append(attention_mask_with_concat)
                         buffer["labels"].append(labels_with_concat)
+                        buffer["position_ids"].append(position_ids)
                         buffer_len += len(input_ids)
diff --git a/src/axolotl/monkeypatch/llama_attn_hijack_flash.py b/src/axolotl/monkeypatch/llama_attn_hijack_flash.py
index 073786882..d900e897d 100644
--- a/src/axolotl/monkeypatch/llama_attn_hijack_flash.py
+++ b/src/axolotl/monkeypatch/llama_attn_hijack_flash.py
@@ -8,9 +8,18 @@ import torch
 import transformers
 from einops import rearrange
 from flash_attn.bert_padding import pad_input, unpad_input
-from flash_attn.flash_attn_interface import flash_attn_varlen_qkvpacked_func
+
+try:
+    from flash_attn.flash_attn_interface import flash_attn_varlen_qkvpacked_func
+except ImportError:
+    from flash_attn.flash_attn_interface import (
+        flash_attn_unpadded_qkvpacked_func as flash_attn_varlen_qkvpacked_func,
+    )
+
 from transformers.models.llama.modeling_llama import apply_rotary_pos_emb
 
+from axolotl.monkeypatch.utils import get_cu_seqlens_from_pos_ids
+
 
 def forward(
     self,
@@ -79,6 +88,16 @@ def forward(
             dtype=torch.int32,
             device=qkv.device,
         )
+        output = flash_attn_varlen_qkvpacked_func(
+            qkv, cu_q_lens, max_s, 0.0, softmax_scale=None, causal=True
+        )
+        output = rearrange(output, "(b s) ... -> b s ...", b=bsz)
+    elif position_ids.shape[0] == 1:
+        # special handling using sample packing
+        qkv = rearrange(qkv, "b s ... -> (b s) ...")
+        cu_q_lens, max_s = get_cu_seqlens_from_pos_ids(position_ids)
+        cu_q_lens = cu_q_lens.squeeze()
+
         output = flash_attn_varlen_qkvpacked_func(
             qkv, cu_q_lens, max_s, 0.0, softmax_scale=None, causal=True
         )
@@ -113,6 +132,7 @@ def forward(
             "b s (h d) -> b s h d",
             h=nheads,
         )
+
     return (
         self.o_proj(rearrange(output, "b s h d -> b s (h d)")),
         None,
diff --git a/src/axolotl/monkeypatch/llama_attn_hijack_xformers.py b/src/axolotl/monkeypatch/llama_attn_hijack_xformers.py
index 02525b7f5..752e204f7 100644
--- a/src/axolotl/monkeypatch/llama_attn_hijack_xformers.py
+++ b/src/axolotl/monkeypatch/llama_attn_hijack_xformers.py
@@ -128,6 +128,7 @@ def xformers_forward(
                 query_states,
                 key_states,
                 value_states,
+                # attn_bias=attention_mask,
                 attn_bias=xformers.ops.LowerTriangularMask(),
             )
         attn_weights = None
diff --git a/src/axolotl/monkeypatch/llama_expand_mask.py b/src/axolotl/monkeypatch/llama_expand_mask.py
new file mode 100644
index 000000000..d69433baa
--- /dev/null
+++ b/src/axolotl/monkeypatch/llama_expand_mask.py
@@ -0,0 +1,52 @@
+"""
+expands the binary attention mask per 3.2.2 of https://arxiv.org/pdf/2107.02027.pdf
+"""
+from typing import Optional
+
+import torch
+
+
+def _expand_mask(mask: torch.Tensor, dtype: torch.dtype, tgt_len: Optional[int] = None):
+    """
+    Expands attention_mask from `[bsz, seq_len]` to `[bsz, 1, tgt_seq_len, src_seq_len]`.
+    This expansion handles packed sequences so that sequences share the same attention mask integer value
+    when they attend to each other within that sequence.
+    This expansion transforms the mask to lower triangular form to prevent future peeking.
+    """
+    bsz, src_len = mask.size()
+    tgt_len = tgt_len if tgt_len is not None else src_len
+
+    mask = mask.unsqueeze(1).unsqueeze(2)
+    mask = mask.expand(bsz, 1, tgt_len, src_len)
+
+    # Create a binary mask from the original mask where zeros remain zeros and all other values are set to one
+    binary_mask = torch.where(
+        mask != 0,
+        torch.tensor(1).to(dtype),
+        torch.tensor(0).to(dtype),
+    )
+
+    # Create a block-diagonal mask.
+    # we multiply by the binary mask so that 0's in the original mask are correctly excluded
+    zero_one_mask = torch.eq(mask, mask.transpose(-1, -2)).int() * binary_mask
+
+    # Now let's create a lower triangular mask of ones that will zero out the upper triangular part
+    lower_triangular_ones = torch.tril(torch.ones((tgt_len, src_len), dtype=dtype)).to(
+        mask.device
+    )
+
+    # Use the lower triangular mask to zero out the upper triangular part of the zero_one_mask
+    masked_zero_one_mask = zero_one_mask * lower_triangular_ones
+    inverted_mask = 1.0 - masked_zero_one_mask
+
+    return inverted_mask.masked_fill(
+        inverted_mask.to(torch.bool), torch.finfo(dtype).min
+    )
+
+
+def hijack_expand_mask():
+    import transformers
+
+    transformers.models.llama.modeling_llama._expand_mask = (  # pylint: disable=protected-access
+        _expand_mask
+    )
diff --git a/src/axolotl/monkeypatch/utils.py b/src/axolotl/monkeypatch/utils.py
new file mode 100644
index 000000000..3b007e05d
--- /dev/null
+++ b/src/axolotl/monkeypatch/utils.py
@@ -0,0 +1,103 @@
+"""
+Shared utils for the monkeypatches
+"""
+import torch
+
+
+def get_cu_seqlens(attn_mask):
+    """generate a cumulative sequence length mask for flash attention using attn mask"""
+    if len(attn_mask.shape) == 1:
+        attn_mask = attn_mask.unsqueeze(0)
+
+    device = attn_mask.device
+    results = []
+    max_seq_lens = []
+
+    for row in attn_mask:
+        # Exclude zeros to avoid adding their positions to the mask
+        t_non_zeros = row[row != 0]
+        # Find where the sequence number changes (including the first position)
+        seq_change = torch.cat(
+            [
+                torch.tensor([1], dtype=torch.int32, device=device),
+                t_non_zeros[1:] != t_non_zeros[:-1],
+            ]
+        )
+        # Get the indices where the sequence changes
+        change_indices = torch.cat(
+            [
+                (seq_change == 1).nonzero(as_tuple=True)[0],
+                torch.tensor([len(t_non_zeros)], dtype=torch.int32, device=device),
+            ]
+        )
+        # Calculate the sequence lengths
+        seq_lengths = change_indices[1:] - change_indices[:-1]
+        # Calculate the length of the final sequence or padding
+        final_seq_length = len(row) - change_indices[-1]
+        # Append the length of the final sequence or padding to seq_lengths
+        if final_seq_length.item():
+            seq_lengths = torch.cat(
+                [
+                    seq_lengths,
+                    torch.tensor(
+                        [final_seq_length.item()], dtype=torch.int32, device=device
+                    ),
+                ]
+            )
+        # Calculate the cumulative sequence lengths
+        cu_seqlens = torch.cat(
+            [torch.tensor([0], dtype=torch.int32, device=device), seq_lengths.cumsum(0)]
+        )
+        max_seq_len = (cu_seqlens[1:] - cu_seqlens[:-1]).max()
+        results.append(cu_seqlens)
+        max_seq_lens.append(max_seq_len)
+
+    return torch.stack(results).to(dtype=torch.int32), torch.stack(max_seq_lens)
+
+
+def get_cu_seqlens_from_pos_ids(position_ids):
+    """generate a cumulative sequence length mask for flash attention using pos ids"""
+    if len(position_ids.shape) == 1:
+        position_ids = position_ids.unsqueeze(0)
+
+    device = position_ids.device
+    results = []
+    max_seq_lens = []
+
+    for row in position_ids:
+        # Count the number of consecutive zeros from the right side
+        padding_length = (row == 0).int().flip(dims=[0]).cumprod(dim=0).sum().item()
+
+        # Adjust the row to exclude padding
+        adjusted_row = row[:-padding_length] if padding_length else row.clone()
+
+        # Find where the position resets to 0 (indicating a new sequence)
+        seq_starts = torch.cat(
+            [
+                torch.tensor([True], dtype=torch.bool, device=device),
+                adjusted_row[1:] == 0,
+            ]
+        )
+        # Get the indices where the sequence starts
+        start_indices = torch.cat(
+            [
+                (seq_starts).nonzero(as_tuple=True)[0],
+                torch.tensor([len(adjusted_row)], dtype=torch.int32, device=device),
+            ]
+        )
+        # Calculate the sequence lengths
+        seq_lengths = start_indices[1:] - start_indices[:-1]
+        # Calculate the cumulative sequence lengths
+        cu_seqlens = torch.cat(
+            [torch.tensor([0], dtype=torch.int32, device=device), seq_lengths.cumsum(0)]
+        )
+        # Append the padding length to the cumulative sequence lengths
+        if padding_length:
+            cu_seqlens = torch.cat(
+                [cu_seqlens, torch.tensor([len(row)], dtype=torch.int32, device=device)]
+            )
+        max_seq_len = (cu_seqlens[1:] - cu_seqlens[:-1]).max()
+        results.append(cu_seqlens)
+        max_seq_lens.append(max_seq_len)
+
+    return torch.stack(results).to(dtype=torch.int32), torch.stack(max_seq_lens)
diff --git a/src/axolotl/prompt_strategies/alpaca_w_system.py b/src/axolotl/prompt_strategies/alpaca_w_system.py
index ea7151366..d56520bd7 100644
--- a/src/axolotl/prompt_strategies/alpaca_w_system.py
+++ b/src/axolotl/prompt_strategies/alpaca_w_system.py
@@ -66,7 +66,11 @@ class SystemDataPrompter(AlpacaPrompter):
     ) -> Generator[str, None, None]:
         # returns the full prompt from instruction and optional input
         # if a label (=response, =output) is provided, it's also appended.
-        formatted_sys_prompt = f"### System:\n{system}\n\n" if system else ""
+        formatted_sys_prompt = (
+            self.system_format.format(system=system)
+            if system and self.system_format
+            else ""
+        )
         if input:
             res = formatted_sys_prompt + self.turn_format.format(
                 instruction=instruction, input=input
@@ -86,12 +90,20 @@ class OpenOrcaSystemDataPrompter(SystemDataPrompter):
     """
 
     def match_prompt_style(self):
+        # pylint: disable=duplicate-code
         if self.prompt_style == PromptStyle.INSTRUCT.value:
             self.turn_format = "### User:\n{instruction}\n\n### Additional Context:\n{input}\n\n### Assistant:\n"
             self.turn_no_input_format = "### User:\n{instruction}\n\n### Assistant:\n"
         if self.prompt_style == PromptStyle.CHAT.value:
             self.turn_format = "USER: {instruction}\n{input}\nASSISTANT:"
             self.turn_no_input_format = "USER: {instruction}\nASSISTANT:"
+            self.system_format = "SYSTEM: {system}\n"
+        if self.prompt_style == PromptStyle.CHATML.value:
+            self.turn_format = "<|im_start|>user\n{instruction}\n{input}<|im_end|>\n<|im_start|>assistant\n"
+            self.turn_no_input_format = (
+                "<|im_start|>user\n{instruction}<|im_end|>\n<|im_start|>assistant\n"
+            )
+            self.system_format = "<|im_start|>system\n{system}<|im_end|>\n"
 
 
 class OpenOrcaPromptTokenizingStrategy(InstructionWSystemPromptTokenizingStrategy):
@@ -137,3 +149,12 @@ def load_open_orca(tokenizer, cfg):
         cfg.train_on_inputs,
         cfg.sequence_len,
     )
+
+
+def load_open_orca_chatml(tokenizer, cfg):
+    return OpenOrcaPromptTokenizingStrategy(
+        OpenOrcaSystemDataPrompter(PromptStyle.CHATML.value),
+        tokenizer,
+        cfg.train_on_inputs,
+        cfg.sequence_len,
+    )
diff --git a/src/axolotl/prompters.py b/src/axolotl/prompters.py
index 2da4ff112..216283582 100644
--- a/src/axolotl/prompters.py
+++ b/src/axolotl/prompters.py
@@ -16,6 +16,7 @@ class PromptStyle(Enum):
 
     INSTRUCT = "instruct"
     CHAT = "chat"
+    CHATML = "chatml"
 
 
 class AlpacaPrompter:
@@ -25,6 +26,7 @@ class AlpacaPrompter:
 
     system_prompt = "Below is an instruction that describes a task, paired with an input that provides further context. Write a response that appropriately completes the request.\n\n"
     system_no_input_prompt = "Below is an instruction that describes a task. Write a response that appropriately completes the request.\n\n"
+    system_format: str
     turn_format: str
     turn_no_input_format: str
     prompt_style: Optional[PromptStyle] = None
@@ -34,14 +36,23 @@ class AlpacaPrompter:
         self.match_prompt_style()
 
     def match_prompt_style(self):
+        # pylint: disable=duplicate-code
         if self.prompt_style == PromptStyle.INSTRUCT.value:
             self.turn_format = "### Instruction:\n{instruction}\n\n### Input:\n{input}\n\n### Response:\n"
             self.turn_no_input_format = (
                 "### Instruction:\n{instruction}\n\n### Response:\n"
             )
+            self.system_format = "### System:\n{system}\n\n"
         if self.prompt_style == PromptStyle.CHAT.value:
             self.turn_format = "USER: {instruction}\n{input}\nASSISTANT:"
             self.turn_no_input_format = "USER: {instruction}\nASSISTANT:"
+            self.system_format = "SYSTEM: {system}\n"
+        if self.prompt_style == PromptStyle.CHATML.value:
+            self.turn_format = "<|im_start|>user\n{instruction}\n{input}<|im_end|>\n<|im_start|>assistant\n"
+            self.turn_no_input_format = (
+                "<|im_start|>user\n{instruction}<|im_end|>\n<|im_start|>assistant\n"
+            )
+            self.system_format = "<|im_start|>system\n{system}<|im_end|>\n"
 
     def build_prompt(
         self,
diff --git a/src/axolotl/utils/collators.py b/src/axolotl/utils/collators.py
new file mode 100644
index 000000000..d7acdc977
--- /dev/null
+++ b/src/axolotl/utils/collators.py
@@ -0,0 +1,121 @@
+"""
+DataCollator for axolotl to pad labels and position_ids for packed sequences
+"""
+from dataclasses import dataclass
+from typing import Any, Optional, Union
+
+import numpy as np
+from transformers import PreTrainedTokenizerBase
+from transformers.utils import PaddingStrategy
+
+
+@dataclass
+class DataCollatorForSeq2Seq:
+    """
+    Data collator that will dynamically pad the inputs received, as well as the labels and position_ids
+
+    Args:
+        tokenizer ([`PreTrainedTokenizer`] or [`PreTrainedTokenizerFast`]):
+            The tokenizer used for encoding the data.
+        model ([`PreTrainedModel`]):
+            The model that is being trained. If set and has the *prepare_decoder_input_ids_from_labels*, use it to
+            prepare the *decoder_input_ids*
+
+            This is useful when using *label_smoothing* to avoid calculating loss twice.
+        padding (`bool`, `str` or [`~utils.PaddingStrategy`], *optional*, defaults to `True`):
+            Select a strategy to pad the returned sequences (according to the model's padding side and padding index)
+            among:
+
+            - `True` or `'longest'` (default): Pad to the longest sequence in the batch (or no padding if only a single
+              sequence is provided).
+            - `'max_length'`: Pad to a maximum length specified with the argument `max_length` or to the maximum
+              acceptable input length for the model if that argument is not provided.
+            - `False` or `'do_not_pad'`: No padding (i.e., can output a batch with sequences of different lengths).
+        max_length (`int`, *optional*):
+            Maximum length of the returned list and optionally padding length (see above).
+        pad_to_multiple_of (`int`, *optional*):
+            If set will pad the sequence to a multiple of the provided value.
+
+            This is especially useful to enable the use of Tensor Cores on NVIDIA hardware with compute capability >=
+            7.5 (Volta).
+        label_pad_token_id (`int`, *optional*, defaults to -100):
+            The id to use when padding the labels (-100 will be automatically ignored by PyTorch loss functions).
+        return_tensors (`str`):
+            The type of Tensor to return. Allowable values are "np", "pt" and "tf".
+    """
+
+    tokenizer: PreTrainedTokenizerBase
+    model: Optional[Any] = None
+    padding: Union[bool, str, PaddingStrategy] = True
+    max_length: Optional[int] = None
+    pad_to_multiple_of: Optional[int] = None
+    label_pad_token_id: int = -100
+    position_pad_token_id: int = 0
+    return_tensors: str = "pt"
+
+    def __call__(self, features, return_tensors=None):
+        labels = None
+        if return_tensors is None:
+            return_tensors = self.return_tensors
+
+        for feature_name, pad_token_id in [
+            ("labels", self.label_pad_token_id),
+            ("position_ids", self.position_pad_token_id),
+        ]:
+            feat = (
+                [feature[feature_name] for feature in features]
+                if feature_name in features[0].keys()
+                else None
+            )
+            labels = feat if feat and feature_name == "labels" else labels
+            # We have to pad the labels before calling `tokenizer.pad` as this method won't pad them and needs them of the
+            # same length to return tensors.
+            if feat is not None:
+                max_feature_length = max(len(l) for l in feat)  # noqa: E741
+                if self.pad_to_multiple_of is not None:
+                    max_feature_length = (
+                        (max_feature_length + self.pad_to_multiple_of - 1)
+                        // self.pad_to_multiple_of
+                        * self.pad_to_multiple_of
+                    )
+
+                padding_side = self.tokenizer.padding_side
+                for feature in features:
+                    remainder = [pad_token_id] * (
+                        max_feature_length - len(feature[feature_name])
+                    )
+                    if isinstance(feature[feature_name], list):
+                        feature[feature_name] = (
+                            feature[feature_name] + remainder
+                            if padding_side == "right"
+                            else remainder + feature[feature_name]
+                        )
+                    elif padding_side == "right":
+                        feature[feature_name] = np.concatenate(
+                            [feature[feature_name], remainder]
+                        ).astype(np.int64)
+                    else:
+                        feature[feature_name] = np.concatenate(
+                            [remainder, feature[feature_name]]
+                        ).astype(np.int64)
+
+        features = self.tokenizer.pad(
+            features,
+            padding=self.padding,
+            max_length=self.max_length,
+            pad_to_multiple_of=self.pad_to_multiple_of,
+            return_tensors=return_tensors,
+        )
+
+        # prepare decoder_input_ids
+        if (
+            labels is not None
+            and self.model is not None
+            and hasattr(self.model, "prepare_decoder_input_ids_from_labels")
+        ):
+            decoder_input_ids = self.model.prepare_decoder_input_ids_from_labels(
+                labels=features["labels"]
+            )
+            features["decoder_input_ids"] = decoder_input_ids
+
+        return features
diff --git a/src/axolotl/utils/data.py b/src/axolotl/utils/data.py
index ee7f16905..fc30c4ce3 100644
--- a/src/axolotl/utils/data.py
+++ b/src/axolotl/utils/data.py
@@ -1,13 +1,19 @@
 """Module containing data utilities"""
 import functools
-import itertools
+import hashlib
 import logging
 from hashlib import md5
 from pathlib import Path
-from typing import List, Tuple, Union
+from typing import Tuple, Union
 
 import torch
-from datasets import Dataset, DatasetDict, load_dataset, load_from_disk
+from datasets import (
+    Dataset,
+    DatasetDict,
+    concatenate_datasets,
+    load_dataset,
+    load_from_disk,
+)
 from huggingface_hub import hf_hub_download
 from transformers import PreTrainedTokenizerBase
 
@@ -35,6 +41,7 @@ from axolotl.prompters import (
     ShareGPTPrompter,
     SummarizeTLDRPrompter,
 )
+from axolotl.utils.distributed import barrier, is_main_process
 
 LOG = logging.getLogger("axolotl")
 
@@ -109,6 +116,7 @@ def load_tokenized_prepared_datasets(
             local_path = Path(d.path)
             if local_path.exists():
                 if local_path.is_dir():
+                    # TODO dirs with arrow or parquet files could be loaded with `load_from_disk`
                     ds = load_dataset(
                         d.path,
                         name=d.name,
@@ -262,20 +270,12 @@ def load_tokenized_prepared_datasets(
                 raise ValueError(
                     f"unhandled prompt tokenization strategy: {d.type} {suffix}"
                 )
-        LOG.info("tokenizing, merging, and shuffling master dataset")
+        LOG.info("merging datasets")
+        dataset = concatenate_datasets(datasets)
 
-        samples: List[int] = []
-        chunk_size = 1000
-        for d in datasets:
-            d_iter = iter(d)
-            while True:
-                chunk = list(itertools.islice(d_iter, chunk_size))
-                if not chunk:
-                    break
-                samples.extend(chunk)
-
-        LOG.info("shuffle")
-        dataset = Dataset.from_list(samples).shuffle(seed=seed)
+        if len(datasets) > 1:
+            LOG.info("shuffle merged datasets")
+            dataset = dataset.shuffle(seed=seed)
         if cfg.local_rank == 0:
             LOG.info(f"Saving merged prepared dataset to disk... {prepared_ds_path}")
             dataset.save_to_disk(prepared_ds_path)
@@ -374,6 +374,7 @@ def load_prepare_datasets(
             dataset = Dataset.from_list(list(constant_len_dataset))
 
             # filter out bad data
+            # TODO convert to dataset.filter(...)
             dataset = Dataset.from_list(
                 [
                     d
@@ -413,7 +414,51 @@ def load_prepare_datasets(
         )
 
     if cfg.val_set_size:
-        dataset = dataset.train_test_split(test_size=cfg.val_set_size, shuffle=False)
+        # ensure we end up with the same fingerprint by doing rank0 first and being able to cache
+        to_hash_train = (
+            dataset._fingerprint  # pylint: disable=protected-access
+            + "|"
+            + str(cfg.val_set_size)
+            + "|"
+            + "train"
+            + "|"
+            + str(cfg.seed or 42)
+        )
+        to_hash_test = (
+            dataset._fingerprint  # pylint: disable=protected-access
+            + "|"
+            + str(cfg.val_set_size)
+            + "|"
+            + "test"
+            + "|"
+            + str(cfg.seed or 42)
+        )
+        train_fingerprint = hashlib.md5(
+            to_hash_train.encode(), usedforsecurity=False
+        ).hexdigest()
+        test_fingerprint = hashlib.md5(
+            to_hash_test.encode(), usedforsecurity=False
+        ).hexdigest()
+
+        if is_main_process():
+            dataset = dataset.train_test_split(
+                test_size=cfg.val_set_size,
+                shuffle=False,
+                seed=cfg.seed or 42,
+                train_new_fingerprint=train_fingerprint,
+                test_new_fingerprint=test_fingerprint,
+            )
+        barrier()
+        if not is_main_process():
+            dataset = dataset.train_test_split(
+                test_size=cfg.val_set_size,
+                shuffle=False,
+                seed=cfg.seed or 42,
+                train_new_fingerprint=train_fingerprint,
+                test_new_fingerprint=test_fingerprint,
+            )
+        barrier()
+
         train_dataset = dataset["train"]
         eval_dataset = dataset["test"]
     else:
diff --git a/src/axolotl/utils/dataloader.py b/src/axolotl/utils/dataloader.py
new file mode 100644
index 000000000..dc3261d63
--- /dev/null
+++ b/src/axolotl/utils/dataloader.py
@@ -0,0 +1,288 @@
+# pylint: skip-file
+import hashlib
+import itertools
+import logging
+import math
+from typing import Any, Callable, List, Union
+
+import numba
+import numpy as np
+from torch.utils.data import DistributedSampler, Sampler
+
+LOG = logging.getLogger("axolotl.utils.dataloader")
+
+
+@numba.njit
+def ffd_check(a: np.ndarray, c: int, n: int):
+    # First-fit-decreasing bin packing
+    # Check if a[] could fit in n bins with capacity c
+    # https://en.wikipedia.org/wiki/First-fit-decreasing_bin_packing
+
+    a = np.sort(a)[::-1]
+    bins = np.full((n,), c, dtype=a.dtype)
+    for size in a:
+        not_found = True
+        for idx in range(n):
+            if bins[idx] >= size:
+                bins[idx] -= size
+                not_found = False
+                break
+
+        if not_found:
+            return False
+
+    return True
+
+
+@numba.njit
+def ffd_with_result(a: np.ndarray, c: int, start_index: int):
+    # First-fit-decreasing bin packing (with result return)
+
+    indices = np.argsort(a)[::-1]
+    a = a[indices]
+
+    bins: List[Any] = []
+    bins_result: List[Any] = []
+    for a_id, size in enumerate(a):
+        add_new = True
+        for idx in range(len(bins)):
+            if bins[idx] >= size:
+                bins[idx] -= size
+                bins_result[idx].append(indices[a_id] + start_index)
+                add_new = False
+                break
+
+        if add_new:
+            bins.append(c - size)
+            bins_result.append([indices[a_id] + start_index])
+
+    return bins_result, len(a)
+
+
+@numba.njit
+def allocate(
+    lengths: np.ndarray, lengths_cumsum: np.ndarray, rank: int, c: int, n: int
+):
+    """
+    :param lengths: array of lengths of each sample
+    :param lengths_cumsum: cumulative sum of consecutive lengths
+    :param rank: rank for this process
+    :param c: length of tokens per batch
+    :param n: number of ranks
+    :return:
+    """
+    # Dynamic batch allocator, similar to Multifit
+    # https://en.wikipedia.org/wiki/Multifit_algorithm
+    # ~99.5% efficiency on OpenChat training set (12 * 2048 ctx len)
+
+    s = 0
+    start_index = 0
+    result = []
+    result_totseqs = []
+
+    while True:
+        # binary search [left, right)
+        left = 1
+        right = 1 + np.searchsorted(lengths_cumsum[start_index:], s + c * n, "right")
+
+        while right - left > 1:
+            mid = (left + right) // 2
+            if ffd_check(lengths[start_index : start_index + mid], c, n):
+                left = mid
+            else:
+                right = mid
+
+        # use length left
+        batch, tot_seqs = ffd_with_result(
+            lengths[start_index : start_index + left], c, start_index
+        )
+        if len(batch) < n:
+            break
+
+        start_index += left
+        s = lengths_cumsum[start_index - 1]
+
+        # add local rank
+        result.append(batch[rank])
+        # add total seqs for all ranks
+        result_totseqs.append(tot_seqs)
+        # yield batch[rank], tot_seqs, s, len(result) * c * n
+    return result, result_totseqs, s, len(result) * c * n
+
+
+def chunk(iterable, n):
+    """
+    Chunk data into tuples of length n
+    """
+    # batched('ABCDEFG', 3) --> ABC DEF G
+    if n < 1:
+        raise ValueError("n must be at least one")
+    it = iter(iterable)
+    while batch := tuple(itertools.islice(it, n)):
+        yield batch
+
+
+def hash_indices(lst: List[int]) -> str:
+    # Convert the list of integers to a string representation
+    concatenated = ",".join(map(str, lst))
+
+    # Generate the hash
+    sha256 = hashlib.sha256()
+    sha256.update(concatenated.encode())
+
+    return sha256.hexdigest()
+
+
+class MultipackDistributedDataloader:
+    """Unpadded data loading using Multipack.
+    Adapted from https://github.com/imoneoi/openchat/blob/v3_fix_mle_loss/ochat/training_deepspeed/multipack_dataloader.py
+    Approximate (at most ~1.22x) the optimal solution of the identical-machines scheduling problem, which is NP-hard.
+    """
+
+    def __init__(
+        self,
+        dataset: Any,
+        collate_fn: Callable,
+        seq_max_length: int = 2048,
+        batch_size: int = 1,
+        sampler: Union[Sampler, DistributedSampler] = None,
+        packing_efficiency_estimate: float = 1.0,
+        sample_packing_seq_len_multiplier: int = 1,
+        device_count: int = 1,
+    ):
+        # Dataset
+        self.dataset = dataset
+        self.lengths = (
+            dataset.data.column("position_ids")
+            .to_pandas()
+            .apply(lambda x: x[-1] + 1)
+            .values
+        )
+        assert isinstance(self.lengths, np.ndarray)
+        assert batch_size % sample_packing_seq_len_multiplier == 0
+        assert batch_size >= sample_packing_seq_len_multiplier
+        self.sampler = sampler
+        self.batch_size = batch_size
+        self.sample_packing_seq_len_multiplier = sample_packing_seq_len_multiplier
+        self.seq_max_length = seq_max_length
+        self.batch_max_length = batch_size * seq_max_length
+        self.collate_fn = collate_fn
+
+        self.num_replicas = 1
+        self.rank = 0
+
+        # statistics
+        self.eff_total_used = 0
+        self.eff_total_slots = 0
+        self.packing_efficiency_estimate = packing_efficiency_estimate or 1.0
+        self.device_count = device_count
+
+    def generate_batches(self, set_stats=False):
+        LOG.info("generating packed batches")
+        if self.sampler:
+            indices = [idx for idx in self.sampler]
+        else:
+            indices = range(0, len(self.dataset))
+
+        LOG.info(hash_indices(indices))
+        lengths = self.lengths[indices]
+        lengths_cumsum = np.cumsum(lengths)
+
+        batches, totseqs, total_used, total_slots = allocate(
+            lengths=lengths,
+            lengths_cumsum=lengths_cumsum,
+            rank=self.rank,
+            # c=self.batch_max_length,
+            c=self.seq_max_length * self.sample_packing_seq_len_multiplier,
+            n=self.num_replicas,
+        )
+
+        batches = [[indices[b_idx] for b_idx in batch] for batch in batches]
+
+        # statistics
+        if set_stats:
+            self.eff_total_used += total_used
+            self.eff_total_slots += total_slots
+
+        return batches, totseqs
+
+    def __iter__(self):
+        if hasattr(self.sampler, "set_epoch"):
+            new_epoch = self.sampler.epoch + 1
+            self.sampler.set_epoch(new_epoch)
+            LOG.info(f"calling sampler.set_epoch({new_epoch})")
+        all_batches, _ = self.generate_batches(set_stats=True)
+        features = self.dataset.features.keys()
+        len_remaining = self._len_est()
+        for batches in chunk(
+            all_batches, self.batch_size // self.sample_packing_seq_len_multiplier
+        ):
+            chunked_data = []
+            attn_mask_cum_idx = 0
+            for batch in batches:
+                concatenated = {}
+                batched_data = [self.dataset[batch_idx] for batch_idx in batch]
+                for feature in features:
+                    if feature == "attention_mask":
+                        arrays = [
+                            (attn_mask_cum_idx + idx + 1) * np.array(item[feature])
+                            for idx, item in enumerate(batched_data)
+                            if feature in item
+                        ]
+                        attn_mask_cum_idx += len(batched_data)
+                        concatenated[feature] = np.concatenate(arrays)
+                    else:
+                        arrays = [
+                            np.array(item[feature])
+                            for item in batched_data
+                            if feature in item
+                        ]
+                        concatenated[feature] = np.concatenate(arrays)
+                chunked_data.append(concatenated)
+            yield self.collate_fn(chunked_data)
+            len_remaining -= 1
+            if not len_remaining:
+                return
+
+    def _len_est(self):
+        lengths_sum = np.sum(self.lengths)
+        lengths_sum_per_device = lengths_sum // self.device_count
+        LOG.info(
+            f"packing_efficiency_estimate: {self.packing_efficiency_estimate} "
+            f"total_num_tokens per device: {lengths_sum_per_device}"
+        )
+
+        # shave off 1% + 1 for dealing with variance in packing from random sampler to sampler
+        return (
+            math.floor(
+                0.99
+                * lengths_sum_per_device
+                / self.packing_efficiency_estimate
+                // self.seq_max_length
+                // self.batch_size
+            )
+            - 1
+        )
+
+    def __len__(self):
+        # this doesn't return the actual length b/c with distributed samplers, not all dataloaders get
+        # the same share of total tokens
+        # if not self.eff_total_used:
+        #     batches, _ = self.generate_batches(set_stats=True)
+        # LOG.info(
+        #     f"packing_efficiency_estimate: {self.packing_efficiency_estimate} "
+        #     f"actual packing efficiency: {self.efficiency()}"
+        # )
+        return max(1, self._len_est())
+
+    def len_w_stats(self):
+        if not self.eff_total_used:
+            batches, _ = self.generate_batches(set_stats=True)
+        LOG.info(
+            f"packing_efficiency_estimate: {self.packing_efficiency_estimate} "
+            f"actual packing efficiency: {self.efficiency()}"
+        )
+        return max(1, self._len_est())
+
+    def efficiency(self):
+        return self.eff_total_used / self.eff_total_slots
diff --git a/src/axolotl/utils/distributed.py b/src/axolotl/utils/distributed.py
new file mode 100644
index 000000000..345b9640c
--- /dev/null
+++ b/src/axolotl/utils/distributed.py
@@ -0,0 +1,41 @@
+"""
+utility helpers for distributed checks
+"""
+import torch.distributed as dist
+from accelerate import Accelerator
+
+accelerate = None  # pylint: disable=invalid-name
+
+
+def load_accelerate():
+    global accelerate  # pylint: disable=global-statement
+    accelerate = Accelerator()
+
+
+def is_distributed():
+    """
+    Check if distributed training is initialized.
+    """
+    global accelerate  # pylint: disable=global-statement
+    if not accelerate:
+        accelerate = Accelerator()
+    return dist.is_available() and dist.is_initialized()
+
+
+def barrier():
+    """
+    Acts as a barrier to wait for all processes. This ensures that all processes
+    reach the barrier before proceeding further.
+    """
+    if is_distributed():
+        dist.barrier()
+
+
+def is_main_process():
+    """
+    Check if the current process is the main process.
+    If not in distributed mode, always return True.
+    """
+    if not is_distributed():
+        return True
+    return dist.get_rank() == 0
diff --git a/src/axolotl/utils/models.py b/src/axolotl/utils/models.py
index 6abbd7265..cfd85f9e5 100644
--- a/src/axolotl/utils/models.py
+++ b/src/axolotl/utils/models.py
@@ -37,20 +37,26 @@ def load_tokenizer(
     tokenizer_type,
     cfg,
 ):
+    tokenizer_kwargs = {}
     use_fast = True  # this is the default
     if cfg.tokenizer_use_fast is not None:
         use_fast = cfg.tokenizer_use_fast
+    if cfg.tokenizer_legacy is not None:
+        # True is the default w/ https://github.com/huggingface/transformers/pull/25224
+        tokenizer_kwargs["legacy"] = cfg.tokenizer_legacy
     if tokenizer_type:
         tokenizer = getattr(transformers, tokenizer_type).from_pretrained(
             tokenizer_config,
             trust_remote_code=cfg.trust_remote_code or False,
             use_fast=use_fast,
+            **tokenizer_kwargs,
         )
     else:
         tokenizer = AutoTokenizer.from_pretrained(
             tokenizer_config,
             trust_remote_code=cfg.trust_remote_code or False,
             use_fast=use_fast,
+            **tokenizer_kwargs,
         )
 
     LOG.debug(f"EOS: {tokenizer.eos_token_id} / {tokenizer.eos_token}")
@@ -90,8 +96,10 @@ def load_model(
 
     # TODO refactor as a kwarg
     load_in_8bit = cfg.load_in_8bit
-    cfg.is_llama_derived_model = "llama" in base_model or (
-        cfg.model_type and "llama" in cfg.model_type.lower()
+    cfg.is_llama_derived_model = (
+        "llama" in base_model
+        or (cfg.model_type and "llama" in cfg.model_type.lower())
+        or cfg.is_llama_derived_model
     )
 
     if cfg.is_llama_derived_model and cfg.flash_attention:
@@ -136,6 +144,14 @@ def load_model(
         LOG.info("patching with xpos rope")
         replace_llama_rope_with_xpos_rope()
 
+    if cfg.is_llama_derived_model and (
+        cfg.max_packed_sequence_len or cfg.sample_packing
+    ):
+        from axolotl.monkeypatch.llama_expand_mask import hijack_expand_mask
+
+        LOG.info("patching _expand_mask")
+        hijack_expand_mask()
+
     if cfg.bf16 or cfg.bfloat16:
         torch_dtype = torch.bfloat16
     elif cfg.load_in_8bit or cfg.fp16 or cfg.float16:
@@ -228,7 +244,6 @@ def load_model(
                 load_in_8bit=cfg.load_in_8bit and cfg.adapter is not None,
                 load_in_4bit=cfg.load_in_4bit and cfg.adapter is not None,
                 torch_dtype=torch_dtype,
-                device_map="auto" if cfg.world_size == 1 else cfg.device_map,
                 **model_kwargs,
             )
         # elif model_type == "GPTNeoXForCausalLM" and cfg.flash_attention:
@@ -263,7 +278,6 @@ def load_model(
                 load_in_8bit=cfg.load_in_8bit and cfg.adapter is not None,
                 load_in_4bit=cfg.load_in_4bit and cfg.adapter is not None,
                 torch_dtype=torch_dtype,
-                device_map=cfg.device_map,
                 trust_remote_code=cfg.trust_remote_code or False,
                 **model_kwargs,
             )
@@ -294,7 +308,6 @@ def load_model(
                 load_in_8bit=cfg.load_in_8bit and cfg.adapter is not None,
                 load_in_4bit=cfg.load_in_4bit and cfg.adapter is not None,
                 torch_dtype=torch_dtype,
-                device_map=cfg.device_map,
                 trust_remote_code=cfg.trust_remote_code or False,
                 **model_kwargs,
             )
@@ -308,7 +321,6 @@ def load_model(
             load_in_8bit=cfg.load_in_8bit and cfg.adapter is not None,
             load_in_4bit=cfg.load_in_4bit and cfg.adapter is not None,
             torch_dtype=torch_dtype,
-            device_map=cfg.device_map,
             trust_remote_code=cfg.trust_remote_code or False,
             **model_kwargs,
         )
diff --git a/src/axolotl/utils/trainer.py b/src/axolotl/utils/trainer.py
index a5d2ea74e..25d0b1e82 100644
--- a/src/axolotl/utils/trainer.py
+++ b/src/axolotl/utils/trainer.py
@@ -1,19 +1,23 @@
 """Module containing the Trainer class and related functions"""
-
 import importlib
 import logging
 import math
 import os
 import sys
+from contextlib import contextmanager
 from dataclasses import dataclass, field
+from functools import partial
 from pathlib import Path
-from typing import Optional
+from typing import Optional, Union
 
 import bitsandbytes as bnb
+import numpy as np
 import torch.cuda
 import transformers
+from datasets import Dataset, set_caching_enabled
 from torch import nn
 from torch.optim.lr_scheduler import OneCycleLR
+from torch.utils.data import DataLoader, DistributedSampler, RandomSampler
 from transformers import EarlyStoppingCallback, Trainer, TrainingArguments
 from transformers.trainer_pt_utils import get_parameter_names
 
@@ -22,6 +26,8 @@ from axolotl.utils.callbacks import (
     SaveBetterTransformerModelCallback,
     SavePeftModelCallback,
 )
+from axolotl.utils.collators import DataCollatorForSeq2Seq
+from axolotl.utils.dataloader import MultipackDistributedDataloader
 from axolotl.utils.schedulers import (
     InterpolatingLogScheduler,
     get_cosine_schedule_with_quadratic_warmup,
@@ -30,6 +36,68 @@ from axolotl.utils.schedulers import (
 LOG = logging.getLogger("axolotl")
 
 
+@torch.jit.script
+def weighted_cross_entropy(
+    logits: torch.Tensor, labels: torch.Tensor, weights: torch.Tensor
+):
+    # Flatten the logits, labels, and weights tensors
+    logits = logits.view(
+        -1, logits.size(-1)
+    )  # logits becomes of shape [batch_size*sequence_length, vocab_size]
+    labels = labels.view(-1)  # labels becomes of shape [batch_size*sequence_length]
+    weights = weights.view(-1)  # weights becomes of shape [batch_size*sequence_length]
+
+    # Compute the unweighted cross entropy loss
+    losses = torch.nn.functional.cross_entropy(logits, labels, reduction="none")
+
+    # Apply the weights to the losses and compute their sum
+    return (weights * losses).sum()
+
+
+@torch.jit.script
+def create_weighted_mask(labels: torch.Tensor):
+    # Check if the tensor is 2D. If not, unsqueeze it to make it 2D
+    if len(labels.shape) == 1:
+        labels = labels.unsqueeze(0)
+
+    weights = torch.zeros_like(labels).float()
+    for i in range(labels.shape[0]):
+        mask = labels[i] != -100
+
+        # Create a tensor to track group ids
+        group_ids = torch.zeros_like(labels[i]).int()
+        curr_group_id = 0
+
+        for j in range(1, len(labels[i])):
+            if mask[j] and not mask[j - 1]:  # switch from masked to unmasked label
+                curr_group_id += 1  # start new group
+            group_ids[j] = (
+                curr_group_id if mask[j] else 0
+            )  # assign group id if unmasked label
+
+        # Count only unmasked labels in each group
+        group_counts = torch.bincount(group_ids[mask])
+
+        mask_weights = torch.zeros_like(labels[i]).float()
+        mask_weights[mask] = 1.0 / group_counts[group_ids[mask]]
+
+        weights[i] = mask_weights
+
+    return weights.squeeze()  # squeeze the output to match the input dimension
+
+
+def trainer_weighted_loss(model_output, labels, shift_labels=True):
+    logits = (
+        model_output["logits"] if isinstance(model_output, dict) else model_output[0]
+    )
+    if shift_labels:
+        logits = logits[..., :-1, :].contiguous()
+        labels = labels[..., 1:].contiguous()
+
+    weights = create_weighted_mask(labels)
+    return weighted_cross_entropy(logits, labels, weights)
+
+
 @dataclass
 class AxolotlTrainingArguments(TrainingArguments):
     """
@@ -40,6 +108,22 @@ class AxolotlTrainingArguments(TrainingArguments):
         default=False,
         metadata={"help": "Use quadratic warmup for cosine scheduling."},
     )
+    sample_packing: bool = field(
+        default=False,
+        metadata={"help": "Use sample packing for efficient training."},
+    )
+    sample_packing_efficiency: float = field(
+        default=1.0,
+        metadata={"help": "Sample packing efficiency for calculating batch length."},
+    )
+    max_seq_length: int = field(
+        default=2048,
+        metadata={"help": "The maximum sequence length the model can handle"},
+    )
+    sample_packing_seq_len_multiplier: int = field(
+        default=1,
+        metadata={"help": "the multiplier for the max len for packed sequences"},
+    )
 
 
 class AxolotlTrainer(Trainer):
@@ -77,6 +161,64 @@ class AxolotlTrainer(Trainer):
                 return super().create_scheduler(num_training_steps, optimizer)
         return self.lr_scheduler
 
+    def _get_train_sampler(self) -> Optional[torch.utils.data.Sampler]:
+        if self.args.world_size > 1 and self.args.sample_packing:
+            return DistributedSampler(
+                self.train_dataset,
+                num_replicas=self.args.world_size,
+                rank=self.args.process_index,
+                seed=self.args.seed,
+            )
+        return super()._get_train_sampler()
+
+    def get_train_dataloader(self) -> Union[DataLoader, MultipackDistributedDataloader]:
+        if self.args.sample_packing:
+            train_sampler = self._get_train_sampler()
+            return self.accelerator.prepare(
+                MultipackDistributedDataloader(
+                    self.train_dataset,
+                    batch_size=self._train_batch_size,
+                    seq_max_length=self.args.max_seq_length,
+                    collate_fn=self.data_collator,
+                    sampler=train_sampler,
+                    packing_efficiency_estimate=self.args.sample_packing_efficiency,
+                    sample_packing_seq_len_multiplier=self.args.sample_packing_seq_len_multiplier,
+                    device_count=int(os.environ.get("WORLD_SIZE", 1)),
+                )
+            )
+        return super().get_train_dataloader()
+
+    def get_eval_dataloader(
+        self, eval_dataset: Optional[Dataset] = None
+    ) -> Union[DataLoader, MultipackDistributedDataloader]:
+        if self.args.sample_packing:
+            eval_dataset = (
+                eval_dataset if eval_dataset is not None else self.eval_dataset
+            )
+            eval_sampler = self._get_eval_sampler(eval_dataset)
+            return self.accelerator.prepare(
+                MultipackDistributedDataloader(
+                    eval_dataset,
+                    batch_size=self.args.eval_batch_size,
+                    seq_max_length=self.args.max_seq_length,
+                    collate_fn=self.data_collator,
+                    sampler=eval_sampler,
+                    packing_efficiency_estimate=self.args.sample_packing_efficiency,
+                    sample_packing_seq_len_multiplier=self.args.eval_batch_size,
+                    device_count=int(os.environ.get("WORLD_SIZE", 1)),
+                )
+            )
+        return super().get_eval_dataloader(eval_dataset)
+
+    def compute_loss(self, model, inputs, return_outputs=False):
+        # use one's weighted cross entropy loss calc
+        # if self.args.sample_packing:
+        #     labels = inputs.pop("labels")
+        #     outputs = model(**inputs)
+        #     loss = trainer_weighted_loss(outputs, labels, shift_labels=True)
+        #     return (loss, outputs) if return_outputs else loss
+        return super().compute_loss(model, inputs, return_outputs=return_outputs)
+
 
 class OneCycleLRSchedulerTrainer(AxolotlTrainer):
     """
@@ -107,10 +249,121 @@ class OneCycleLRSchedulerTrainer(AxolotlTrainer):
         return self.lr_scheduler
 
 
-def setup_trainer(cfg, train_dataset, eval_dataset, model, tokenizer):
-    total_num_steps = int(
-        math.ceil(len(train_dataset) * cfg.num_epochs / cfg.batch_size)
-    )
+def add_position_ids(sample):
+    sample["position_ids"] = torch.arange(len(sample["input_ids"]))
+    return sample
+
+
+def drop_long_seq(sample, sequence_len=2048):
+    return len(sample["input_ids"]) <= sequence_len
+
+
+@contextmanager
+def disable_datasets_caching():
+    try:
+        set_caching_enabled(False)
+        yield
+    finally:
+        set_caching_enabled(True)
+
+
+def process_datasets_for_packing(cfg, train_dataset, eval_dataset):
+    if cfg.sample_packing:
+        drop_long = partial(drop_long_seq, sequence_len=cfg.sequence_len)
+        train_dataset = train_dataset.filter(drop_long, num_proc=os.cpu_count()).map(
+            add_position_ids, num_proc=os.cpu_count()
+        )
+        if eval_dataset:
+            eval_dataset = eval_dataset.filter(drop_long, num_proc=os.cpu_count()).map(
+                add_position_ids, num_proc=os.cpu_count()
+            )
+    return train_dataset, eval_dataset
+
+
+def calculate_total_num_steps(cfg, train_dataset, tokenizer):
+    if cfg.sample_packing:
+        # we have to drop anything longer then sequence len otherwise
+        # flash attention with position ids fails
+        if not cfg.total_num_tokens:
+            LOG.info("calculating total_num_tokens")
+            total_num_tokens = np.sum(
+                train_dataset.data.column("input_ids")
+                .to_pandas()
+                .apply(lambda x: len(x))  # pylint: disable=unnecessary-lambda
+                .values
+            )
+            LOG.info(f"📝 UPDATE CONFIG WITH: `total_num_tokens: {total_num_tokens}`")
+            cfg.total_num_tokens = total_num_tokens
+
+        if cfg.sample_packing_eff_est:
+            total_num_steps = (
+                # match count to len est in dataloader
+                (
+                    math.floor(
+                        0.99
+                        * cfg.total_num_tokens
+                        / cfg.sample_packing_eff_est
+                        / cfg.sequence_len
+                        // cfg.batch_size
+                        // int(os.environ.get("WORLD_SIZE", 1))
+                    )
+                    - 1
+                )
+                * cfg.num_epochs
+            )
+            LOG.info(
+                f"total_num_tokens: {cfg.total_num_tokens}, total_num_steps: {total_num_steps}"
+            )
+        else:
+            sampler = RandomSampler(train_dataset)
+            data_loader = MultipackDistributedDataloader(
+                train_dataset,
+                batch_size=cfg.micro_batch_size,
+                seq_max_length=cfg.max_packed_sequence_len or cfg.sequence_len,
+                collate_fn=DataCollatorForSeq2Seq(
+                    tokenizer,
+                    return_tensors="pt",
+                    padding="longest",
+                ),
+                sampler=sampler,
+                packing_efficiency_estimate=cfg.sample_packing_eff_est,
+                sample_packing_seq_len_multiplier=cfg.micro_batch_size,
+                device_count=int(os.environ.get("WORLD_SIZE", 1)),
+            )
+            data_loader_len = data_loader.len_w_stats()
+            actual_eff = data_loader.efficiency()
+            LOG.info(f"data_loader_len: {data_loader_len}")
+            total_num_steps = int(
+                math.floor(
+                    data_loader_len
+                    * cfg.micro_batch_size
+                    * cfg.num_epochs
+                    // cfg.batch_size
+                )
+            )
+            LOG.info(
+                f"📝 UPDATE CONFIG WITH: `sample_packing_eff_est: {math.ceil(actual_eff * 100.0) / 100.0}`"
+            )
+            cfg.sample_packing_eff_est = math.ceil(actual_eff * 100.0) / 100.0
+    else:
+        total_num_steps = int(
+            math.ceil(len(train_dataset) * cfg.num_epochs / cfg.batch_size)
+        )
+    LOG.info(f"total_num_steps: {total_num_steps}")
+    return total_num_steps
+
+
+def setup_fsdp_envs(cfg):
+    os.environ["ACCELERATE_USE_FSDP"] = "true"
+    if cfg.fsdp_config.fsdp_sync_module_states:
+        os.environ["FSDP_SYNC_MODULE_STATES"] = "true"
+    if cfg.fsdp_config.fsdp_state_dict_type:
+        os.environ["FSDP_STATE_DICT_TYPE"] = cfg.fsdp_config.fsdp_state_dict_type
+
+
+def setup_trainer(cfg, train_dataset, eval_dataset, model, tokenizer, total_num_steps):
+    if cfg.fsdp:
+        setup_fsdp_envs(cfg)
     warmup_steps = (
         cfg.warmup_steps
         if cfg.warmup_steps is not None
@@ -190,7 +443,14 @@ def setup_trainer(cfg, train_dataset, eval_dataset, model, tokenizer):
     if cfg.save_safetensors:
         training_arguments_kwargs["save_safetensors"] = cfg.save_safetensors
 
+    if cfg.sample_packing_eff_est:
+        training_arguments_kwargs[
+            "sample_packing_efficiency"
+        ] = cfg.sample_packing_eff_est
+
     training_args = AxolotlTrainingArguments(  # pylint: disable=unexpected-keyword-arg
+        # max_steps=total_num_steps,  # this is helpful in case we don't actually know total # of steps
+        max_seq_length=cfg.sequence_len,
         per_device_train_batch_size=cfg.micro_batch_size,
         per_device_eval_batch_size=cfg.eval_batch_size
         if cfg.eval_batch_size is not None
@@ -204,7 +464,7 @@ def setup_trainer(cfg, train_dataset, eval_dataset, model, tokenizer):
         eval_steps=cfg.eval_steps if cfg.val_set_size > 0 else None,
         save_steps=cfg.save_steps,
         output_dir=cfg.output_dir,
-        save_total_limit=3,
+        save_total_limit=cfg.save_total_limit if cfg.save_total_limit else 4,
         load_best_model_at_end=(
             cfg.load_best_model_at_end is not False
             and cfg.val_set_size > 0
@@ -222,6 +482,8 @@ def setup_trainer(cfg, train_dataset, eval_dataset, model, tokenizer):
         if cfg.lr_scheduler and cfg.lr_scheduler not in ("one_cycle", "log_sweep")
         else "cosine",
         weight_decay=cfg.weight_decay if cfg.weight_decay is not None else 0.0,
+        sample_packing=cfg.sample_packing if cfg.sample_packing else False,
+        sample_packing_seq_len_multiplier=cfg.micro_batch_size,
         **training_arguments_kwargs,
     )
 
@@ -316,11 +578,11 @@ def setup_trainer(cfg, train_dataset, eval_dataset, model, tokenizer):
     if cfg.collator_pad_to_longest:
         data_collator_kwargs["padding"] = "longest"
     else:
-        data_collator_kwargs["pad_to_multiple_of"] = 8
+        # A100 is best at 64, while others at 8. Let's use the larger so we don't have to check
+        # https://docs.nvidia.com/deeplearning/performance/dl-performance-matrix-multiplication/index.html
+        data_collator_kwargs["pad_to_multiple_of"] = 64
 
     if cfg.is_llama_derived_model and cfg.landmark_attention:
-        from functools import partial
-
         from axolotl.monkeypatch.llama_landmark_attn import (
             add_mem_tokens,
             get_mem_id,
@@ -348,7 +610,7 @@ def setup_trainer(cfg, train_dataset, eval_dataset, model, tokenizer):
         train_dataset=train_dataset,
         eval_dataset=eval_dataset,
         args=training_args,
-        data_collator=transformers.DataCollatorForSeq2Seq(
+        data_collator=DataCollatorForSeq2Seq(
             tokenizer,
             return_tensors="pt",
             **data_collator_kwargs,
diff --git a/src/axolotl/utils/validation.py b/src/axolotl/utils/validation.py
index db29fcdfa..97d70c4c8 100644
--- a/src/axolotl/utils/validation.py
+++ b/src/axolotl/utils/validation.py
@@ -8,6 +8,19 @@ LOG = logging.getLogger("axolotl")
 
 
 def validate_config(cfg):
+    if cfg.max_packed_sequence_len and cfg.sample_packing:
+        raise ValueError(
+            "please set only one of max_packed_sequence_len (deprecated soon) or sample_packing"
+        )
+    if cfg.max_packed_sequence_len:
+        LOG.warning(
+            str(
+                PendingDeprecationWarning(
+                    "max_packed_sequence_len will be deprecated in favor of sample_packing"
+                )
+            )
+        )
+
     if cfg.gradient_accumulation_steps and cfg.batch_size:
         raise ValueError(
             "please set only one of gradient_accumulation_steps or batch_size"
@@ -104,6 +117,17 @@ def validate_config(cfg):
             + "point to its path, and remove model_revision from the config."
         )
 
+    if cfg.sample_packing and cfg.sdp_attention:
+        # incompatible due to bug w/ accelerate causing 0.0 loss when using llama2
+        raise ValueError(
+            "sample_packing not compatible with sdp_attention. Use flash_attention"
+        )
+
+    if cfg.sample_packing and cfg.xformers_attention:
+        raise ValueError(
+            "sample_packing not compatible with xformers_attention. Use flash_attention"
+        )
+
     # TODO
     # MPT 7b
     # https://github.com/facebookresearch/bitsandbytes/issues/25
diff --git a/tests/monkeypatch/test_llama_attn_hijack_flash.py b/tests/monkeypatch/test_llama_attn_hijack_flash.py
new file mode 100644
index 000000000..289c01a86
--- /dev/null
+++ b/tests/monkeypatch/test_llama_attn_hijack_flash.py
@@ -0,0 +1,30 @@
+"""
+Unit tests for the monkeypatch utils
+"""
+import unittest
+
+import torch
+
+from axolotl.monkeypatch.utils import get_cu_seqlens, get_cu_seqlens_from_pos_ids
+
+
+class TestMonkeyPatchUtils(unittest.TestCase):
+    """
+    Unit test class for monkeypatch utils
+    """
+
+    def test_get_cu_seqlens_1d(self):
+        attn_mask = torch.tensor([[1, 1, 1, 1, 2, 2, 2, 3, 3, 3, 3, 3, 4, 4, 0, 0]])
+        target_res = torch.tensor([0, 4, 7, 12, 14, 16], dtype=torch.int32)
+        self.assertTrue(torch.allclose(get_cu_seqlens(attn_mask)[0], target_res))
+
+    def test_get_cu_seqlens_from_pos_ids_1d(self):
+        position_ids = torch.tensor([[0, 1, 2, 3, 0, 1, 2, 0, 1, 2, 3, 4, 0, 1, 0, 0]])
+        target_res = torch.tensor([0, 4, 7, 12, 14, 16], dtype=torch.int32)
+        self.assertTrue(
+            torch.allclose(get_cu_seqlens_from_pos_ids(position_ids)[0], target_res)
+        )
+
+
+if __name__ == "__main__":
+    unittest.main()
diff --git a/tests/test_expand_mask.py b/tests/test_expand_mask.py
new file mode 100644
index 000000000..01241c295
--- /dev/null
+++ b/tests/test_expand_mask.py
@@ -0,0 +1,44 @@
+"""
+Unit tests for the monkey patch for expand mask to handle packed sequences
+"""
+import unittest
+
+import torch
+
+from axolotl.monkeypatch.llama_expand_mask import _expand_mask
+
+
+class TestExpandMask(unittest.TestCase):
+    """
+    Test class for attention mask expansion for packed sequences
+    """
+
+    def test_output(self):
+        mask = torch.tensor([[1, 1, 1, 2], [2, 3, 3, 0]])
+        dtype = torch.float32
+        expected_output = torch.tensor(
+            [
+                [
+                    [
+                        [0.0000e00, -3.4028e38, -3.4028e38, -3.4028e38],
+                        [0.0000e00, 0.0000e00, -3.4028e38, -3.4028e38],
+                        [0.0000e00, 0.0000e00, 0.0000e00, -3.4028e38],
+                        [-3.4028e38, -3.4028e38, -3.4028e38, 0.0000e00],
+                    ]
+                ],
+                [
+                    [
+                        [0.0000e00, -3.4028e38, -3.4028e38, -3.4028e38],
+                        [-3.4028e38, 0.0000e00, -3.4028e38, -3.4028e38],
+                        [-3.4028e38, 0.0000e00, 0.0000e00, -3.4028e38],
+                        [-3.4028e38, -3.4028e38, -3.4028e38, -3.4028e38],
+                    ]
+                ],
+            ]
+        )
+        # Check that the output matches the expected output
+        self.assertTrue(torch.allclose(_expand_mask(mask, dtype), expected_output))
+
+
+if __name__ == "__main__":
+    unittest.main()
diff --git a/tests/test_packed_dataset.py b/tests/test_packed_dataset.py
index 1f19d0ecc..da8fb7a93 100644
--- a/tests/test_packed_dataset.py
+++ b/tests/test_packed_dataset.py
@@ -27,7 +27,7 @@ class TestPacking(unittest.TestCase):
             }
         )
 
-    def test_resets_attention(self):
+    def test_increments_attention(self):
         prompter = AlpacaPrompter("chat")
         strat = AlpacaPromptTokenizingStrategy(
             prompter,
@@ -55,10 +55,14 @@ class TestPacking(unittest.TestCase):
         # first example doesn't have mask reset
         assert example["input_ids"][0] == self.tokenizer.bos_token_id
         assert example["attention_mask"][0] == 1
+        assert example["position_ids"][0] == 0
+        assert example["position_ids"][1] == 1
 
         # but subsequent one does
         assert example["input_ids"][next_bos_index] == self.tokenizer.bos_token_id
-        assert example["attention_mask"][next_bos_index] == 0
+        assert example["attention_mask"][next_bos_index] == 2
+        assert example["position_ids"][next_bos_index] == 0
+        assert example["position_ids"][next_bos_index + 1] == 1
 
 
 if __name__ == "__main__":
diff --git a/tests/test_prompt_tokenizers.py b/tests/test_prompt_tokenizers.py
index b4dd3cbd7..1dd511f6b 100644
--- a/tests/test_prompt_tokenizers.py
+++ b/tests/test_prompt_tokenizers.py
@@ -134,9 +134,15 @@ class InstructionWSystemPromptTokenizingStrategyTest(unittest.TestCase):
             "output": "Hi! How can I help?",
         }
         example = strat.tokenize_prompt(sample)
-        assert example["input_ids"][0:4] == [1, 835, 2184, 29901]  # "<s>### System:"
-        assert example["input_ids"][5:7] == [1509, 20118]  # "use cot"
-        assert example["input_ids"][9] == 11889  # USER
+        assert example["input_ids"][0:5] == [
+            1,
+            28962,
+            1254,
+            12665,
+            29901,
+        ]  # "<s>SYSTEM:"
+        assert example["input_ids"][5:7] == [671, 20118]  # " use cot"
+        assert example["input_ids"][8] == 11889  # USER
 
 
 class Llama2ChatTokenizationTest(unittest.TestCase):
diff --git a/tests/test_prompters.py b/tests/test_prompters.py
index 112f25d33..6c5b8f27c 100644
--- a/tests/test_prompters.py
+++ b/tests/test_prompters.py
@@ -70,7 +70,7 @@ class AlpacaPrompterTest(unittest.TestCase):
             )
         )
         assert "use cot" in res
-        assert res.startswith("### System:")
+        assert res.startswith("SYSTEM:")
         assert "### Instruction:" not in res
         assert "### Input:" not in res
         assert "alpacas" in res
diff --git a/tests/test_validation.py b/tests/test_validation.py
index 88c97f0b7..e956d7b40 100644
--- a/tests/test_validation.py
+++ b/tests/test_validation.py
@@ -313,3 +313,27 @@ class ValidationTest(unittest.TestCase):
         )
 
         validate_config(cfg)
+
+    def test_packing(self):
+        cfg = DictDefault(
+            {
+                "max_packed_sequence_len": 2048,
+            }
+        )
+        with self._caplog.at_level(logging.WARNING):
+            validate_config(cfg)
+            assert any(
+                "max_packed_sequence_len will be deprecated in favor of sample_packing"
+                in record.message
+                for record in self._caplog.records
+            )
+
+        cfg = DictDefault(
+            {
+                "max_packed_sequence_len": 2048,
+                "sample_packing": True,
+            }
+        )
+        regex_exp = r".*set only one of max_packed_sequence_len \(deprecated soon\) or sample_packing.*"
+        with pytest.raises(ValueError, match=regex_exp):
+            validate_config(cfg)