diff --git a/Dockerfile_gaudi b/Dockerfile_gaudi
index e7e7031b..4bda27cf 100644
--- a/Dockerfile_gaudi
+++ b/Dockerfile_gaudi
@@ -99,6 +99,7 @@ RUN cd server && \
     BUILD_CUDA_EXT=0 pip install git+https://github.com/AutoGPTQ/AutoGPTQ.git@097dd04e --no-build-isolation && \
     pip install . --no-cache-dir
 RUN pip install git+https://github.com/sywangyi/vllm-hpu-extension.git@bmax_fix
+RUN pip install compressed-tensors==0.9.1
 
 # Install benchmarker
 COPY --from=builder /usr/src/target/release-opt/text-generation-benchmark /usr/local/bin/text-generation-benchmark
diff --git a/backends/gaudi/server/text_generation_server/cli.py b/backends/gaudi/server/text_generation_server/cli.py
index 59e8a96f..8fa2b263 100644
--- a/backends/gaudi/server/text_generation_server/cli.py
+++ b/backends/gaudi/server/text_generation_server/cli.py
@@ -19,6 +19,7 @@ class Quantization(str, Enum):
     gptq = "gptq"
     awq = "awq"
     fp8 = "fp8"
+    compressed_tensors = "compressed-tensors"
 
 
 class Dtype(str, Enum):
@@ -109,6 +110,7 @@ def serve(
         "gptq",
         "awq",
         "fp8",
+        "compressed-tensors",
     }:
         raise RuntimeError(
             "Only 1 can be set between `dtype` and `quantize`, as they both decide how goes the final model."
diff --git a/backends/gaudi/server/text_generation_server/layers/compressed_tensors/__init__.py b/backends/gaudi/server/text_generation_server/layers/compressed_tensors/__init__.py
new file mode 100644
index 00000000..507af706
--- /dev/null
+++ b/backends/gaudi/server/text_generation_server/layers/compressed_tensors/__init__.py
@@ -0,0 +1,3 @@
+from .loader import CompressedTensorsLoader
+
+__all__ = ["CompressedTensorsLoader"]
diff --git a/backends/gaudi/server/text_generation_server/layers/compressed_tensors/loader.py b/backends/gaudi/server/text_generation_server/layers/compressed_tensors/loader.py
new file mode 100644
index 00000000..0dccf34a
--- /dev/null
+++ b/backends/gaudi/server/text_generation_server/layers/compressed_tensors/loader.py
@@ -0,0 +1,169 @@
+from typing import Any, Dict, List, Union
+
+from compressed_tensors import QuantizationConfig, QuantizationStatus
+from compressed_tensors.config import CompressionFormat
+from compressed_tensors.quantization import (
+    QuantizationScheme,
+    QuantizationType,
+    find_name_or_class_matches,
+)
+from loguru import logger
+from pydantic import ValidationError
+from torch import nn
+
+from text_generation_server.layers.compressed_tensors.w8an_fp import W8ANFpLoader
+from text_generation_server.utils.log import log_once
+from text_generation_server.utils.weights import (
+    DefaultWeightsLoader,
+    UnquantizedWeight,
+    Weights,
+    WeightsLoader,
+)
+
+# compressed-tensors can match modules as quantization targets. However,
+# they need to be objects rather than classes or class names. Since we
+# need to match `Linear` targets, make an instance that can be re-used.
+_EMPTY_LINEAR: nn.Module = nn.Linear(0, 0)
+
+
+class CompressedTensorsLoader(WeightsLoader):
+    """Loader for checkpoints stored in the compressed-tensors format."""
+
+    def __init__(self, config: Dict[str, Any]):
+        quantization_config_raw = config.get("quantization_config")
+        if quantization_config_raw is None:
+            # `compression_config` was renamed to `quantization_config`; support
+            # retained for backward compatibility.
+            quantization_config_raw = config.get("compression_config")
+        if quantization_config_raw is None:
+            raise ValueError(
+                "Checkpoint does not have compressed-tensors configuration"
+            )
+
+        try:
+            quantization_config = QuantizationConfig.model_validate(
+                quantization_config_raw
+            )
+        except ValidationError as e:
+            raise ValueError("Cannot parse compressed-tensors configuration") from e
+
+        if quantization_config.quantization_status not in (
+            QuantizationStatus.COMPRESSED,
+            QuantizationStatus.FROZEN,
+        ):
+            raise ValueError(
+                f"Model quantization was not finished, status was: {quantization_config.quantization_status}"
+            )
+
+        self.ignore = (
+            quantization_config.ignore if quantization_config.ignore is not None else []
+        )
+        self.loaders = self._get_target_loaders(quantization_config)
+
+        for target, loader in self.loaders.items():
+            log_once(
+                logger.info,
+                f"Using {loader} for compressed-tensors target '{target}'",
+            )
+
+    def get_weights(self, weights: Weights, prefix: str):
+        loader = self._lookup_loader(prefix)
+        return loader.get_weights(weights, prefix)
+
+    def get_weights_col_packed(
+        self,
+        weights: "Weights",
+        prefix: str,
+        block_sizes: Union[int, List[int]],
+    ):
+        loader = self._lookup_loader(prefix)
+        return loader.get_weights_col_packed(weights, prefix, block_sizes)
+
+    def get_multi_weights_col(self, weights: Weights, prefixes: List[str], dim: int):
+        loader = self._lookup_loader(prefixes[0])
+        return loader.get_multi_weights_col(weights, prefixes, dim)
+
+    def get_multi_weights(self, weights: Weights, prefixes: List[str], dim: int):
+        loader = self._lookup_loader(prefixes[0])
+        return loader.get_multi_weights(weights, prefixes, dim)
+
+    def get_weights_row(self, weights: Weights, prefix: str):
+        loader = self._lookup_loader(prefix)
+        return loader.get_weights_row(weights, prefix)
+
+    def _get_target_loaders(
+        self, quantization_config: QuantizationConfig
+    ) -> Dict[str, WeightsLoader]:
+        """
+        A compressed-tensors checkpoint can use different quantizations
+        for different targets. This method returns a dictionary with a
+        loader per target.
+        """
+
+        loaders: Dict[str, WeightsLoader] = {}
+
+        format = quantization_config.format
+
+        for group_name, group in quantization_config.config_groups.items():
+            # The group configuration can be a string, but does that ever
+            # happen in a serialized quantization config?
+            assert isinstance(group, QuantizationScheme)
+
+            loader = self._create_loader_for_group(format, group_name, group)
+
+            # A quantized parameter group can have multiple targets, add the
+            # loader for all the targets.
+            for target in group.targets:
+                if target in loaders:
+                    raise ValueError(
+                        f"Target '{target} has multiple configured loaders'"
+                    )
+                loaders[target] = loader
+
+        return loaders
+
+    def _create_loader_for_group(
+        self, format: str, group_name: str, group: QuantizationScheme
+    ) -> WeightsLoader:
+        """
+        Find and create a loader for the group with the given quantization
+        scheme.
+        """
+        # NOTE: we ignore group.output_activations because we don't support
+        #       output quantization yet.
+
+        input_activations = group.input_activations
+        weights = group.weights
+        if (
+            format
+            in {
+                CompressionFormat.float_quantized.value,
+                CompressionFormat.naive_quantized.value,
+            }
+            and weights is not None
+            and weights.type == QuantizationType.FLOAT
+            and weights.num_bits == 8
+        ):
+            # FP W8A8 or W8A16.
+            return W8ANFpLoader(input_activations=input_activations, weights=weights)
+        else:
+            raise ValueError(
+                f"Group '{group_name}' has unsupported compressed-tensors configurtion"
+            )
+
+    def _lookup_loader(self, prefix: str) -> WeightsLoader:
+        """
+        Look up the loader to use for a given parameter name (prefix).
+        """
+
+        if len(find_name_or_class_matches(prefix, _EMPTY_LINEAR, self.ignore)) > 0:
+            return DefaultWeightsLoader(UnquantizedWeight)
+
+        # We currently only handle linear layers, so unconditionally pass
+        # a `Linear` instance.
+        targets = find_name_or_class_matches(prefix, _EMPTY_LINEAR, self.loaders.keys())
+        if len(targets) == 0:
+            raise ValueError(
+                f"Cannot find compressed-tensors target for prefix: {prefix}"
+            )
+        return self.loaders[targets[0]]
diff --git a/backends/gaudi/server/text_generation_server/layers/compressed_tensors/w8an_fp.py b/backends/gaudi/server/text_generation_server/layers/compressed_tensors/w8an_fp.py
new file mode 100644
index 00000000..6eb00387
--- /dev/null
+++ b/backends/gaudi/server/text_generation_server/layers/compressed_tensors/w8an_fp.py
@@ -0,0 +1,253 @@
+from typing import List, Optional, Union
+
+import torch
+from compressed_tensors.quantization import QuantizationArgs, QuantizationType
+
+from text_generation_server.layers.fp8 import (
+    Fp8Weight,
+    _load_scalar_or_matrix_scale,
+    requantize_with_max_scale,
+)
+from text_generation_server.utils.weights import Weights, WeightsLoader
+
+
+class W8ANFpLoader(WeightsLoader):
+    """
+    Loader for W8A8/W8A16 FP compressed-tensors parameters.
+    """
+
+    def __init__(
+        self,
+        *,
+        input_activations: Optional[QuantizationArgs],
+        weights: QuantizationArgs,
+    ):
+        assert weights.type == QuantizationType.FLOAT and weights.num_bits == 8
+
+        # We ignore the `strategy` option which sets the scales to be
+        # per-tensor, per-channel or per-token. What scales are supported
+        # is dependent on the kernels used (e.g. cutlass can do tokenwise,
+        # Torch cannot, and FP8-Marlin does not quantize inputs at all).
+        # So, instead we try to use the best-possible configuration.
+
+        self.load_weight_scale = not weights.dynamic
+        self.load_input_scale = (
+            input_activations is not None and not input_activations.dynamic
+        )
+        self.force_w8a16 = (
+            input_activations is not None and input_activations.num_bits == 16
+        )
+
+    def __str__(self) -> str:
+        def scale_to_str(scale):
+            return "static" if scale else "dynamic"
+
+        quantization_type = f"W8A{16 if self.force_w8a16 else 8}"
+
+        return f"{self.__class__.__name__} ({quantization_type}, weight: {scale_to_str(self.load_weight_scale)}, input: {scale_to_str(self.load_input_scale)})"
+
+    def get_weights(self, weights: "Weights", prefix: str):
+        w = weights.get_tensor(f"{prefix}.weight")
+
+        weight_scale = None
+        if self.load_weight_scale:
+            weight_scale = (
+                weights.get_tensor(f"{prefix}.weight_scale", to_dtype=False)
+                .reshape(-1)
+                .expand(w.shape[0])
+            )
+            logical_widths = [w.shape[0]]
+            w, weight_scale = requantize_with_max_scale(
+                w,
+                weight_scale.unsqueeze(-1).to(weights.device),
+                logical_widths,
+                weights.dtype,
+            )
+
+        input_scale = None
+        if self.load_input_scale:
+            input_scale = weights.get_tensor(
+                f"{prefix}.input_scale", to_dtype=False
+            ).reshape(-1)
+
+        return Fp8Weight(
+            weight=w,
+            weight_scale=weight_scale,
+            input_scale=input_scale,
+            dtype=weights.dtype,
+            force_w8a16=self.force_w8a16,
+        )
+
+    def get_weights_col_packed(
+        self,
+        weights: Weights,
+        prefix: str,
+        block_sizes: Union[int, List[int]],
+    ):
+        w = weights.get_packed_sharded(
+            f"{prefix}.weight", dim=0, block_sizes=block_sizes
+        )
+
+        weight_scale = None
+        if self.load_weight_scale:
+            weight_scale = weights.get_tensor(f"{prefix}.weight_scale", to_dtype=False)
+            if weight_scale.numel() > 1:
+                weight_scale = weights.get_packed_sharded(
+                    f"{prefix}.weight_scale",
+                    dim=0,
+                    block_sizes=block_sizes,
+                    to_dtype=False,
+                )
+            weight_scale = weight_scale.reshape(-1).expand(w.shape[0])
+            logical_widths = [w.shape[0]]
+            w, weight_scale = requantize_with_max_scale(
+                w,
+                weight_scale.unsqueeze(-1).to(weights.device),
+                logical_widths,
+                weights.dtype,
+            )
+
+        input_scale = None
+        if self.load_input_scale:
+            input_scale = weights.get_tensor(f"{prefix}.input_scale", to_dtype=False)
+            if input_scale.numel() > 1:
+                input_scale = weights.get_packed_sharded(
+                    f"{prefix}.input_scale",
+                    dim=0,
+                    block_sizes=block_sizes,
+                    to_dtype=False,
+                )
+            input_scale = input_scale.reshape(-1).max()
+
+        return Fp8Weight(
+            weight=w,
+            weight_scale=weight_scale,
+            input_scale=input_scale,
+            dtype=weights.dtype,
+            force_w8a16=self.force_w8a16,
+        )
+
+    def get_multi_weights_col(self, weights: "Weights", prefixes: List[str], dim: int):
+        # FIXME: Force to_device to false as fp8 weights do not support torch.cat on device yet
+        w = [
+            weights.get_sharded(f"{p}.weight", dim=0, to_device=False) for p in prefixes
+        ]
+        shapes = [x.shape for x in w]
+
+        # Concat then send to the device
+        w = torch.cat(w, dim=dim).to(weights.device)
+
+        weight_scale = None
+        if self.load_weight_scale:
+            weight_scale = [
+                _load_scalar_or_matrix_scale(weights, f"{p}.weight_scale", shape)
+                for p, shape in zip(prefixes, shapes)
+            ]
+            weight_scale = torch.cat(weight_scale, dim=0).reshape(-1)
+            logical_widths = [x[0] for x in shapes]
+            w, weight_scale = requantize_with_max_scale(
+                w,
+                weight_scale.unsqueeze(-1).to(weights.device),
+                logical_widths,
+                weights.dtype,
+            )
+
+        input_scale = None
+        if self.load_input_scale:
+            input_scale = [
+                _load_scalar_or_matrix_scale(weights, f"{p}.input_scale", shape)
+                for p, shape in zip(prefixes, shapes)
+                if weights.has_tensor(f"{p}.input_scale")
+            ]
+            assert len(input_scale) == 0 or len(input_scale) == len(prefixes)
+            input_scale = (
+                torch.cat(input_scale, dim=0).reshape(-1).max()
+                if len(input_scale) != 0
+                else None
+            )
+
+        return Fp8Weight(
+            weight=w,
+            weight_scale=weight_scale,
+            input_scale=input_scale,
+            dtype=weights.dtype,
+            force_w8a16=self.force_w8a16,
+        )
+
+    def get_multi_weights(self, weights: "Weights", prefixes: List[str], dim: int):
+        # FIXME: Force to_device to false as fp8 weights do not support torch.cat on device yet
+        w = [weights.get_tensor(f"{p}.weight", to_device=False) for p in prefixes]
+        shapes = [x.shape for x in w]
+
+        # Concat then send to the device
+        w = torch.cat(w, dim=dim).to(weights.device)
+
+        weight_scale = None
+
+        if self.load_weight_scale:
+            weight_scale = [
+                weights.get_tensor(f"{p}.weight_scale", to_dtype=False)
+                .reshape(-1)
+                .expand(shape[0])
+                for p, shape in zip(prefixes, shapes)
+            ]
+            weight_scale = torch.cat(weight_scale, dim=0).reshape(-1)
+            logical_widths = [x[0] for x in shapes]
+            w, weight_scale = requantize_with_max_scale(
+                w,
+                weight_scale.unsqueeze(-1).to(weights.device),
+                logical_widths,
+                weights.dtype,
+            )
+
+        input_scale = None
+        if self.load_input_scale:
+            input_scale = [
+                weights.get_tensor(f"{p}.input_scale", to_dtype=False)
+                .reshape(-1)
+                .expand(shape[0])
+                for p, shape in zip(prefixes, shapes)
+                if weights.has_tensor(f"{p}.input_scale")
+            ]
+            assert len(input_scale) == 0 or len(input_scale) == len(prefixes)
+            input_scale = (
+                torch.cat(input_scale, dim=0).reshape(-1).max()
+                if len(input_scale) != 0
+                else None
+            )
+
+        return Fp8Weight(
+            weight=w,
+            weight_scale=weight_scale,
+            input_scale=input_scale,
+            dtype=weights.dtype,
+            force_w8a16=self.force_w8a16,
+        )
+
+    def get_weights_row(self, weights: "Weights", prefix: str):
+        w = weights.get_sharded(f"{prefix}.weight", dim=1)
+        weight_scale = None
+        if self.load_weight_scale:
+            weight_scale = weights.get_tensor(f"{prefix}.weight_scale", to_dtype=False)
+            weight_scale = weight_scale.reshape(-1).expand(w.shape[0])
+            logical_widths = [w.shape[0]]
+            w, weight_scale = requantize_with_max_scale(
+                w,
+                weight_scale.unsqueeze(-1).to(weights.device),
+                logical_widths,
+                weights.dtype,
+            )
+
+        input_scale = None
+        if self.load_input_scale:
+            input_scale = weights.get_tensor(
+                f"{prefix}.input_scale", to_dtype=False
+            ).reshape(-1)
+
+        return Fp8Weight(
+            weight=w,
+            weight_scale=weight_scale,
+            input_scale=input_scale,
+            dtype=weights.dtype,
+            force_w8a16=self.force_w8a16,
+        )
diff --git a/backends/gaudi/server/text_generation_server/layers/fp8.py b/backends/gaudi/server/text_generation_server/layers/fp8.py
index 44d30202..8de335ac 100644
--- a/backends/gaudi/server/text_generation_server/layers/fp8.py
+++ b/backends/gaudi/server/text_generation_server/layers/fp8.py
@@ -207,7 +207,7 @@ def requantize_with_max_scale(
     for idx, logical_width in enumerate(logical_widths):
         end = start + logical_width
         weight_dq = per_tensor_dequantize(
-            weight[start:end, :], weight_scale[idx], dtype
+            weight[start:end, :], weight_scale[start:end, :], dtype
         )
         weight[start:end, :], max_w_scale_normalized = fp8_quantize(
             weight_dq, max_w_scale
@@ -270,6 +270,11 @@ class HybridFP8UnquantLoader(WeightsLoader):
                 )
             # FP8 branch
             scale = weights.get_tensor(f"{prefix}.weight_scale", to_dtype=False)
+            scale = scale.reshape(-1).expand(w.shape[0])
+            logical_widths = [w.shape[0]]
+            w, scale = requantize_with_max_scale(
+                w, scale.unsqueeze(-1).to(weights.device), logical_widths, weights.dtype
+            )
 
             input_scale = None
             if weights.has_tensor(f"{prefix}.input_scale"):
@@ -278,10 +283,6 @@ class HybridFP8UnquantLoader(WeightsLoader):
                     .reshape(-1)
                     .max()
                 )
-            logical_widths = [w.shape[0]]
-            w, scale = requantize_with_max_scale(
-                w, scale.unsqueeze(0), logical_widths, weights.dtype
-            )
 
             return Fp8Weight(
                 weight=w,
@@ -316,6 +317,11 @@ class HybridFP8UnquantLoader(WeightsLoader):
                     block_sizes=block_sizes,
                     to_dtype=False,
                 )
+            scale = scale.reshape(-1).expand(w.shape[0])
+            logical_widths = [w.shape[0]]
+            w, scale = requantize_with_max_scale(
+                w, scale.unsqueeze(-1).to(weights.device), logical_widths, weights.dtype
+            )
 
             input_scale = None
             if weights.has_tensor(f"{prefix}.input_scale"):
@@ -330,10 +336,6 @@ class HybridFP8UnquantLoader(WeightsLoader):
                         to_dtype=False,
                     )
                 input_scale = input_scale.reshape(-1).max()
-            logical_widths = [w.shape[0]]
-            w, scale = requantize_with_max_scale(
-                w, scale.unsqueeze(0), logical_widths, weights.dtype
-            )
 
             return Fp8Weight(
                 weight=w,
@@ -380,6 +382,11 @@ class HybridFP8UnquantLoader(WeightsLoader):
             ]
             scale = torch.cat(scale, dim=0).reshape(-1)
 
+            logical_widths = [x[0] for x in shapes]
+            w, scale = requantize_with_max_scale(
+                w, scale.unsqueeze(-1).to(weights.device), logical_widths, weights.dtype
+            )
+
             input_scale = [
                 _load_scalar_or_matrix_scale(weights, f"{p}.input_scale", shape)
                 for p, shape in zip(prefixes, shapes)
@@ -392,11 +399,6 @@ class HybridFP8UnquantLoader(WeightsLoader):
                 else None
             )
 
-            logical_widths = [x[0] for x in shapes]
-            w, scale = requantize_with_max_scale(
-                w, scale.to(weights.device), logical_widths, weights.dtype
-            )
-
             return Fp8Weight(
                 weight=w,
                 weight_scale=scale,
@@ -435,11 +437,18 @@ class HybridFP8UnquantLoader(WeightsLoader):
                 )
 
             scale = [
-                weights.get_tensor(f"{p}.weight_scale", to_dtype=False).reshape(-1)
-                for p in prefixes
+                weights.get_tensor(f"{p}.weight_scale", to_dtype=False)
+                .reshape(-1)
+                .expand(shape[0])
+                for p, shape in zip(prefixes, shapes)
             ]
             scale = torch.cat(scale, dim=0).reshape(-1)
 
+            logical_widths = [x[0] for x in shapes]
+            w, scale = requantize_with_max_scale(
+                w, scale.unsqueeze(-1).to(weights.device), logical_widths, weights.dtype
+            )
+
             input_scale = [
                 weights.get_tensor(f"{p}.input_scale", to_dtype=False).reshape(-1)
                 for p in prefixes
@@ -452,11 +461,6 @@ class HybridFP8UnquantLoader(WeightsLoader):
                 else None
             )
 
-            logical_widths = [x[0] for x in shapes]
-            w, scale = requantize_with_max_scale(
-                w, scale.to(weights.device), logical_widths, weights.dtype
-            )
-
             return Fp8Weight(
                 weight=w,
                 weight_scale=scale,
@@ -485,7 +489,15 @@ class HybridFP8UnquantLoader(WeightsLoader):
                     weight_block_size=self.weight_block_size,
                 )
 
-            scale = weights.get_tensor(f"{prefix}.weight_scale", to_dtype=False)
+            scale = (
+                weights.get_tensor(f"{prefix}.weight_scale", to_dtype=False)
+                .reshape(-1)
+                .expand(w.shape[0])
+            )
+            logical_widths = [w.shape[0]]
+            w, scale = requantize_with_max_scale(
+                w, scale.unsqueeze(-1).to(weights.device), logical_widths, weights.dtype
+            )
 
             input_scale = None
             if weights.has_tensor(f"{prefix}.input_scale"):
@@ -494,10 +506,7 @@ class HybridFP8UnquantLoader(WeightsLoader):
                     .reshape(-1)
                     .max()
                 )
-            logical_widths = [w.shape[0]]
-            w, scale = requantize_with_max_scale(
-                w, scale.unsqueeze(0), logical_widths, weights.dtype
-            )
+
             return Fp8Weight(
                 weight=w,
                 weight_scale=scale,
@@ -615,45 +624,32 @@ class Fp8Linear(torch.nn.Module):
             weight_block_size=weight_block_size,
         )
 
-    @classmethod
-    def get_shared_device_identity(cls, device):
-        # Input scaling factors are no longer optional in _scaled_mm starting
-        # from pytorch 2.5. Allocating a dummy tensor to pass as input_scale
-        if device not in cls._device_identity_cache:
-            cls._device_identity_cache[device] = torch.ones(1, device=device)
-        return cls._device_identity_cache[device]
-
     def forward(self, input: torch.Tensor) -> torch.Tensor:
-        if self.weight_block_size is not None:
+        if self.weight_block_size is not None or self.input_scale is None:
             return apply_block_fp8_linear_hpu_dynamic(
                 input, self.qweight, self.scale, self.input_scale, self.bias
             )
 
-        qinput, scale = fp8_quantize(
-            input,
-            self.input_scale,
-            scale_upper_bound=self.scale_upper_bound,
-            scalar=True,
-        )
-
-        output = torch._scaled_mm(
-            qinput,
-            self.qweight.t(),
-            out_dtype=self.dtype,
-            scale_a=scale,
-            scale_b=self.scale,
+        x_fp8 = torch.ops.hpu.cast_to_fp8_v2(
+            input, 1.0 / self.input_scale, False, False, torch.float8_e4m3fn
+        )[0]
+        return torch.ops.hpu.fp8_gemm_v2(
+            A=x_fp8,
+            trans_A=False,
+            B=self.qweight,
+            trans_B=True,
+            D=None,
+            out_dtype=input.dtype,
+            A_scale_inv=self.input_scale,
+            B_scale_inv=self.scale,
             bias=self.bias,
+            accumulate=False,
         )
 
-        if isinstance(output, tuple) and len(output) == 2:
-            output = output[0]
-
-        return output
-
 
 def _load_scalar_or_matrix_scale(weights: Weights, prefix: str, shape: torch.Size):
     scale = weights.get_tensor(prefix, to_dtype=False)
 
     if scale.numel() > 1:
         scale = weights.get_sharded(prefix, dim=0, to_dtype=False)
-    return scale.reshape(-1)
+    return scale.reshape(-1).expand(shape[0])
diff --git a/backends/gaudi/server/text_generation_server/layers/gptq/__init__.py b/backends/gaudi/server/text_generation_server/layers/gptq/__init__.py
index babf3d4b..96b120b2 100644
--- a/backends/gaudi/server/text_generation_server/layers/gptq/__init__.py
+++ b/backends/gaudi/server/text_generation_server/layers/gptq/__init__.py
@@ -276,6 +276,63 @@ class GPTQWeightsLoader(WeightsLoader):
             use_exllama=use_exllama,
         )
 
+    def get_multi_weights(self, weights: Weights, prefixes: List[str], dim: int):
+        if self.is_layer_skipped_quantization(prefixes[0], self.modules_to_not_convert):
+            return DefaultWeightsLoader.get_multi_weights(weights, prefixes, dim)
+        try:
+            qweight = torch.cat(
+                [weights.get_tensor(f"{p}.qweight") for p in prefixes], dim=1
+            )
+        except RuntimeError:
+            raise RuntimeError(
+                f"Cannot load `{self.quantize}` weight, make sure the model is already quantized"
+            )
+
+        scales = torch.cat([weights.get_tensor(f"{p}.scales") for p in prefixes], dim=1)
+
+        self._get_gptq_params(weights)
+
+        qzeros = torch.cat([weights.get_tensor(f"{p}.qzeros") for p in prefixes], dim=1)
+
+        use_exllama = self.bits == 4 and self.quantize == "gptq" and not self.desc_act
+
+        if self.quantize == "gptq" and self.quant_method == "gptq":
+            w = [weights.get_tensor(f"{p}.g_idx") for p in prefixes]
+            for w2 in w[1:]:
+                torch.testing.assert_close(w2, w[0])
+            g_idx = w[0]
+        elif self.quantize == "gptq" and self.quant_method == "awq":
+            log_once(
+                logger.info, "Converting AWQ model to Exllama/GPTQ packing format."
+            )
+            from text_generation_server.layers.awq.conversion_utils import (
+                fast_awq_to_gptq,
+            )
+
+            qweight, qzeros = fast_awq_to_gptq(qweight, qzeros)
+            if use_exllama:
+                g_idx = None
+            else:
+                g_idx = (
+                    torch.arange(
+                        qweight.shape[0] * (32 // self.bits),
+                        device=qweight.device,
+                    )
+                ).to(dtype=torch.int32)
+        else:
+            g_idx = None
+
+        return GPTQWeight(
+            qweight=qweight,
+            qzeros=qzeros,
+            scales=scales,
+            g_idx=g_idx,
+            bits=self.bits,
+            groupsize=self.groupsize,
+            use_awq_kernel=self.quantize == "awq",
+            use_exllama=use_exllama,
+        )
+
     def get_weights_row(self, weights: Weights, prefix: str):
         self._get_gptq_params(weights)
 
diff --git a/backends/gaudi/server/text_generation_server/models/__init__.py b/backends/gaudi/server/text_generation_server/models/__init__.py
index 32a9b9bf..d2d7c836 100644
--- a/backends/gaudi/server/text_generation_server/models/__init__.py
+++ b/backends/gaudi/server/text_generation_server/models/__init__.py
@@ -309,7 +309,6 @@ class ModelType(enum.Enum):
         "name": "Qwen 3 Moe",
         "url": "https://huggingface.co/collections/Qwen/qwen3-67dd247413f0e2e4f653967f",
     }
-
     GALACTICA = {
         "type": "galactica",
         "name": "Galactica",
@@ -832,7 +831,6 @@ def get_model(
                 trust_remote_code=trust_remote_code,
                 lora_adapter_ids=lora_adapter_ids,
             )
-
         elif model_type == MLLAMA:
             return FlashMllamaCausalLM(
                 model_id=model_id,
diff --git a/backends/gaudi/server/text_generation_server/models/custom_modeling/flash_llama4_modeling.py b/backends/gaudi/server/text_generation_server/models/custom_modeling/flash_llama4_modeling.py
index 98994e48..11864c52 100644
--- a/backends/gaudi/server/text_generation_server/models/custom_modeling/flash_llama4_modeling.py
+++ b/backends/gaudi/server/text_generation_server/models/custom_modeling/flash_llama4_modeling.py
@@ -22,6 +22,7 @@ import torch.utils.checkpoint
 from torch import nn
 import torch.nn.functional as F
 
+import habana_frameworks.torch as htorch
 from transformers.cache_utils import Cache
 from transformers.activations import ACT2FN
 from transformers.modeling_rope_utils import ROPE_INIT_FUNCTIONS
@@ -567,6 +568,9 @@ class Llama4TextModel(nn.Module):
         )
 
         freqs_ci = self.rotary_emb(hidden_states, position_ids.view(bs, -1))
+        lazy_mode = htorch.utils.internal.is_lazy()
+        if lazy_mode:
+            htorch.core.mark_step()
 
         for i, layer in enumerate(self.layers):
             hidden_states = layer(
@@ -582,6 +586,8 @@ class Llama4TextModel(nn.Module):
                 position_ids=position_ids,
                 hpu_attention_meta=hpu_attention_meta,
             )
+            if lazy_mode:
+                htorch.core.mark_step()
 
         hidden_states, _ = self.norm(hidden_states)
 
diff --git a/backends/gaudi/server/text_generation_server/models/custom_modeling/flash_qwen3_modeling.py b/backends/gaudi/server/text_generation_server/models/custom_modeling/flash_qwen3_modeling.py
index cce64196..1b4af58a 100644
--- a/backends/gaudi/server/text_generation_server/models/custom_modeling/flash_qwen3_modeling.py
+++ b/backends/gaudi/server/text_generation_server/models/custom_modeling/flash_qwen3_modeling.py
@@ -14,6 +14,7 @@ from typing import Optional, Tuple, List
 
 import torch
 from torch import nn
+import habana_frameworks.torch as htorch
 from text_generation_server.layers.attention import (
     paged_attention,
     attention,
@@ -26,14 +27,7 @@ from text_generation_server.layers import (
     TensorParallelRowLinear,
     TensorParallelColumnLinear,
     SpeculativeHead,
-    FastLinear,
 )
-from text_generation_server.utils.import_utils import (
-    synchronize,
-    get_free_memory,
-)
-from loguru import logger
-from text_generation_server.utils.log import log_master
 
 
 from text_generation_server.layers.layernorm import (
@@ -53,12 +47,9 @@ class Qwen3Attention(nn.Module):
         self.head_dim = getattr(
             config, "head_dim", config.hidden_size // config.num_attention_heads
         )
-        config.num_key_value_heads = getattr(
-            config, "num_key_value_heads", config.num_attention_heads
+        self.num_key_value_groups = (
+            config.num_attention_heads // config.num_key_value_heads
         )
-        # self.num_key_value_groups = (
-        #     config.num_attention_heads // config.num_key_value_heads
-        # )
         self.num_heads = config.num_attention_heads
         self.attention_dropout = config.attention_dropout
         self.softmax_scale = self.head_dim**-0.5
@@ -75,65 +66,16 @@ class Qwen3Attention(nn.Module):
                 f"and `num_shards`: {weights.process_group.size()}"
             )
         self.num_heads = self.num_heads // weights.process_group.size()
-        # self.num_key_value_heads = config.num_key_value_heads
-        if config.num_key_value_heads > weights.process_group.size():
-            self.num_key_value_heads = (
-                config.num_key_value_heads // weights.process_group.size()
-            )
-        else:
-            self.num_key_value_heads = config.num_key_value_heads
-
-        self.query_proj = TensorParallelColumnLinear.load(
+        self.num_key_value_heads = (
+            config.num_key_value_heads // weights.process_group.size()
+        )
+        self.query_key_value = TensorParallelColumnLinear.load_multi(
             config,
-            prefix=f"{prefix}.q_proj",
+            prefixes=[f"{prefix}.q_proj", f"{prefix}.k_proj", f"{prefix}.v_proj"],
+            dim=0,
             weights=weights,
             bias=False,
         )
-        if self.num_key_value_heads != config.num_key_value_heads:
-            self.key_proj = TensorParallelColumnLinear.load(
-                config,
-                prefix=f"{prefix}.k_proj",
-                weights=weights,
-                bias=False,
-            )
-            self.value_proj = TensorParallelColumnLinear.load(
-                config,
-                prefix=f"{prefix}.v_proj",
-                weights=weights,
-                bias=False,
-            )
-        else:
-            self.key_proj = FastLinear.load(
-                config,
-                prefix=f"{prefix}.k_proj",
-                weights=weights,
-                bias=False,
-            )
-            self.value_proj = FastLinear.load(
-                config,
-                prefix=f"{prefix}.v_proj",
-                weights=weights,
-                bias=False,
-            )
-        # self.key_proj = TensorParallelColumnLinear.load(
-        #     config,
-        #     prefix=f"{prefix}.k_proj",
-        #     weights=weights,
-        #     bias=False,
-        # )
-        # self.value_proj = TensorParallelColumnLinear.load(
-        #     config,
-        #     prefix=f"{prefix}.v_proj",
-        #     weights=weights,
-        #     bias=False,
-        # )
-        # self.query_key_value = TensorParallelColumnLinear.load_multi(
-        #     config,
-        #     prefixes=[f"{prefix}.q_proj", f"{prefix}.k_proj", f"{prefix}.v_proj"],
-        #     dim=0,
-        #     weights=weights,
-        #     bias=False,
-        # )
 
         self.kv_scales = get_kv_scales(weights, f"{prefix}")
 
@@ -144,10 +86,11 @@ class Qwen3Attention(nn.Module):
             bias=False,
         )
 
-        self.num_key_value_groups = self.num_heads // self.num_key_value_heads
+
+        self.num_groups = self.num_heads // self.num_key_value_heads
         self.kv_head_mapping = torch.arange(
             0, self.num_key_value_heads, dtype=torch.int32, device=weights.device
-        ).repeat_interleave(self.num_key_value_groups)
+        ).repeat_interleave(self.num_groups)
 
         self.max_past = (
             config.sliding_window if config.sliding_window is not None else -1
@@ -182,45 +125,21 @@ class Qwen3Attention(nn.Module):
         seqlen,
         hpu_attention_meta,
     ) -> Tuple[torch.Tensor, Optional[torch.Tensor], Optional[Tuple[torch.Tensor]]]:
-        print(f"hidden_states shape: {hidden_states.shape}")
         input_shape = hidden_states.shape[:-1]
         hidden_shape = (*input_shape, -1, self.head_dim)
-        # qkv = self.query_key_value(hidden_states)
-        # print(f"qkv shape: {qkv.shape}")
-        # print(f"self.head_dim: {self.head_dim}")
-        # print(f"self.num_heads: {self.num_heads}")
-        # print(f"self.num_key_value_heads: {self.num_key_value_heads}")
-        # query_states, key_states, value_states = qkv.split(
-        #     [
-        #         self.head_dim * self.num_heads,
-        #         self.head_dim * self.num_key_value_heads,
-        #         self.head_dim * self.num_key_value_heads,
-        #     ],
-        #     dim=1,
-        # )
-        synchronize(hidden_states.device)
-        real_free_memory = get_free_memory(hidden_states.device, 1)
-        log_master(
-            logger.debug,
-            f"Attention forward1 Free memory real: {real_free_memory / 1e9:.2f}GB",
+        qkv = self.query_key_value(hidden_states)
+        query_states, key_states, value_states = qkv.split(
+            [
+                self.head_dim * self.num_heads,
+                self.head_dim * self.num_key_value_heads,
+                self.head_dim * self.num_key_value_heads,
+            ],
+            dim=1,
         )
 
-        query_states = self.query_proj(hidden_states)
-        key_states = self.key_proj(hidden_states)
-        value_states = self.value_proj(hidden_states)
         query_states, _ = self.q_norm(query_states.view(hidden_shape))
         key_states, _ = self.k_norm(key_states.view(hidden_shape))
         value_states = value_states.view(hidden_shape)
-        print(f"query_states shape: {query_states.shape}")
-        print(f"key_states shape: {key_states.shape}")
-        print(f"value_states shape: {value_states.shape}")
-        synchronize(hidden_states.device)
-        real_free_memory = get_free_memory(hidden_states.device, 1)
-        log_master(
-            logger.debug,
-            f"Attention forward2 Free memory real: {real_free_memory / 1e9:.2f}GB",
-        )
-
         self.rotary_emb(query_states, key_states, cos, sin)
 
         kv_cache.store(
@@ -257,7 +176,6 @@ class Qwen3Attention(nn.Module):
             )
 
         attn_output = attn_output.reshape(*input_shape, -1).contiguous()
-        print(f"attn_output shape: {attn_output.shape}")
         return self.o_proj(attn_output)
 
 
@@ -359,6 +277,11 @@ class Qwen3Model(nn.Module):
         )
 
         residual = None
+
+        lazy_mode = htorch.utils.internal.is_lazy()
+        if lazy_mode:
+            htorch.core.mark_step()
+
         for i, decoder_layer in enumerate(self.layers):
             hidden_states = decoder_layer(
                 hidden_states,
@@ -371,6 +294,8 @@ class Qwen3Model(nn.Module):
                 seqlen,
                 hpu_attention_meta,
             )
+            if lazy_mode:
+                htorch.core.mark_step()
 
         hidden_states, _ = self.norm(hidden_states)
 
diff --git a/backends/gaudi/server/text_generation_server/utils/quantization.py b/backends/gaudi/server/text_generation_server/utils/quantization.py
index 022a4897..192963c4 100644
--- a/backends/gaudi/server/text_generation_server/utils/quantization.py
+++ b/backends/gaudi/server/text_generation_server/utils/quantization.py
@@ -122,6 +122,13 @@ def _get_quantizer_config(model_id, revision):
 def get_loader(
     quantize: Optional[str], model_id: str, revision: Optional[str]
 ) -> WeightsLoader:
+    if quantize == "compressed-tensors":
+        config = _get_config_json(model_id, revision, "config.json")
+        from text_generation_server.layers.compressed_tensors import (
+            CompressedTensorsLoader,
+        )
+
+        return CompressedTensorsLoader(config)
     quantizer_config = _get_quantizer_config(model_id, revision)
     if quantize in {"awq", "gptq"}:
         from text_generation_server.layers.gptq import GPTQWeightsLoader
diff --git a/backends/v3/src/block_allocator.rs b/backends/v3/src/block_allocator.rs
index 1628a00b..c8b29204 100644
--- a/backends/v3/src/block_allocator.rs
+++ b/backends/v3/src/block_allocator.rs
@@ -162,6 +162,11 @@ impl Allocator for SimpleAllocator {
         tokens: u32,
         _prefill_tokens: Option<Arc<Vec<u32>>>,
     ) -> Option<BlockAllocation> {
+        let mut tokens = tokens;
+        if self.is_hpu_device {
+            // need 1 slot for ping-pong optimization
+            tokens += 1;
+        }
         // Apply window size
         let (required_blocks, repeats) = {
             let (tokens, repeats) = match self.window_size {
@@ -176,8 +181,7 @@ impl Allocator for SimpleAllocator {
             let required_blocks = tokens.div_ceil(self.block_size);
             (required_blocks, repeats)
         };
-
-        let mut tokens = tokens as usize;
+        let tokens = tokens as usize;
         if required_blocks > self.free_blocks.len() as u32 {
             None
         } else {
@@ -189,8 +193,6 @@ impl Allocator for SimpleAllocator {
                 .split_off(self.free_blocks.len() - required_blocks as usize);
             if self.is_hpu_device {
                 blocks.sort();
-                // need 1 slot for ping-pong optimization
-                tokens += 1;
             }
             let mut slots =
                 Vec::with_capacity((required_blocks * self.block_size * repeats as u32) as usize);