diff --git a/vllm/config/model.py b/vllm/config/model.py
index 092c67e7bed8..082f90653f5a 100644
--- a/vllm/config/model.py
+++ b/vllm/config/model.py
@@ -20,9 +20,6 @@ from vllm.config.pooler import PoolerConfig
 from vllm.config.scheduler import RunnerType
 from vllm.config.utils import assert_hashable, config, getattr_iter
 from vllm.logger import init_logger
-from vllm.model_executor.layers.batch_invariant import (
-    vllm_is_batch_invariant,
-)
 from vllm.platforms import current_platform
 from vllm.transformers_utils.config import (
     ConfigFormat,
@@ -436,10 +433,6 @@ class ModelConfig:
         skip_mm_profiling: bool | None,
         video_pruning_rate: float | None,
     ) -> None:
-        # Enable batch invariance settings if requested
-        if vllm_is_batch_invariant():
-            self.enforce_eager = True
-
         # Set the default seed to 0 in V1.
         # NOTE(woosuk): In V1, we use separate processes for workers (unless
         # VLLM_ENABLE_V1_MULTIPROCESSING=0), so setting a seed here
diff --git a/vllm/envs.py b/vllm/envs.py
index 2744335ed3d3..21237c70a45e 100755
--- a/vllm/envs.py
+++ b/vllm/envs.py
@@ -251,6 +251,9 @@ def disable_compile_cache() -> bool:
 
 
 def use_aot_compile() -> bool:
+    from vllm.model_executor.layers.batch_invariant import (
+        vllm_is_batch_invariant,
+    )
     from vllm.utils.torch_utils import is_torch_equal_or_newer
 
     default_value = (
@@ -259,7 +262,10 @@ def use_aot_compile() -> bool:
         else "0"
     )
 
-    return os.environ.get("VLLM_USE_AOT_COMPILE", default_value) == "1"
+    return (
+        not vllm_is_batch_invariant()
+        and os.environ.get("VLLM_USE_AOT_COMPILE", default_value) == "1"
+    )
 
 
 def env_with_choices(
diff --git a/vllm/model_executor/layers/batch_invariant.py b/vllm/model_executor/layers/batch_invariant.py
index 5706786bccb1..39e77b935d3d 100644
--- a/vllm/model_executor/layers/batch_invariant.py
+++ b/vllm/model_executor/layers/batch_invariant.py
@@ -11,6 +11,7 @@ import torch
 import vllm.envs as envs
 from vllm.logger import init_logger
 from vllm.triton_utils import tl, triton
+from vllm.utils.torch_utils import is_torch_equal_or_newer
 
 logger = init_logger(__name__)
 
@@ -716,6 +717,10 @@ def linear_batch_invariant(input, weight, bias=None):
 _batch_invariant_MODE = False
 _batch_invariant_LIB = None
 _original_torch_bmm = None
+_original_fp16_reduction_precision = None
+_original_bf16_reduction_precision = None
+_original_cublas_workspace_cfg = None
+_original_cublaslt_workspace_size = None
 
 
 def is_batch_invariant_mode_enabled():
@@ -724,6 +729,8 @@ def is_batch_invariant_mode_enabled():
 
 def enable_batch_invariant_mode():
     global _batch_invariant_MODE, _batch_invariant_LIB, _original_torch_bmm
+    global _original_fp16_reduction_precision, _original_bf16_reduction_precision
+    global _original_cublas_workspace_cfg, _original_cublaslt_workspace_size
     if _batch_invariant_MODE:
         return
 
@@ -745,14 +752,75 @@ def enable_batch_invariant_mode():
     _original_torch_bmm = torch.bmm
     torch.bmm = bmm_batch_invariant
 
+    _original_bf16_reduction_precision = (
+        torch.backends.cuda.matmul.allow_bf16_reduced_precision_reduction
+    )
+    _original_fp16_reduction_precision = (
+        torch.backends.cuda.matmul.allow_fp16_reduced_precision_reduction
+    )
+
+    reduced_precision_val = (
+        (False, False) if is_torch_equal_or_newer("2.10.0.dev") else False
+    )
+    torch.backends.cuda.matmul.allow_fp16_reduced_precision_reduction = (
+        reduced_precision_val
+    )
+    torch.backends.cuda.matmul.allow_bf16_reduced_precision_reduction = (
+        reduced_precision_val
+    )
+    torch.backends.cuda.preferred_blas_library(backend="cublaslt")
+
+    if not is_torch_equal_or_newer("2.10.0.dev"):
+        _original_cublas_workspace_cfg = os.environ.get("CUBLAS_WORKSPACE_CONFIG", None)
+        _original_cublaslt_workspace_size = os.environ.get(
+            "CUBLASLT_WORKSPACE_SIZE", None
+        )
+        os.environ["CUBLAS_WORKSPACE_CONFIG"] = ":16:8"
+        os.environ["CUBLASLT_WORKSPACE_SIZE"] = "1"
+
 
 def disable_batch_invariant_mode():
     global _batch_invariant_MODE, _batch_invariant_LIB, _original_torch_bmm
+    global _original_fp16_reduction_precision, _original_bf16_reduction_precision
+    global _original_cublas_workspace_cfg, _original_cublaslt_workspace_size
+    if not _batch_invariant_MODE:
+        return
+
     if _batch_invariant_LIB is not None:
         _batch_invariant_LIB._destroy()
     if _original_torch_bmm is not None:
         torch.bmm = _original_torch_bmm
         _original_torch_bmm = None
+
+    if _original_bf16_reduction_precision is not None:
+        torch.backends.cuda.matmul.allow_bf16_reduced_precision_reduction = (
+            _original_bf16_reduction_precision
+        )
+        _original_bf16_reduction_precision = None
+    if _original_fp16_reduction_precision is not None:
+        torch.backends.cuda.matmul.allow_fp16_reduced_precision_reduction = (
+            _original_fp16_reduction_precision
+        )
+        _original_fp16_reduction_precision = None
+
+    torch.backends.cuda.preferred_blas_library(backend="default")
+
+    if not is_torch_equal_or_newer("2.10.0.dev"):
+        # Set cublas env vars to previous results. If previous results are None,
+        # that means the env vars were not set, so we should remove them.
+        if _original_cublas_workspace_cfg:
+            os.environ["CUBLAS_WORKSPACE_CONFIG"] = _original_cublas_workspace_cfg
+        elif "CUBLAS_WORKSPACE_CONFIG" in os.environ:
+            del os.environ["CUBLAS_WORKSPACE_CONFIG"]
+
+        if _original_cublaslt_workspace_size:
+            os.environ["CUBLASLT_WORKSPACE_SIZE"] = _original_cublaslt_workspace_size
+        elif "CUBLASLT_WORKSPACE_SIZE" in os.environ:
+            del os.environ["CUBLASLT_WORKSPACE_SIZE"]
+
+    _original_cublas_workspace_cfg = None
+    _original_cublaslt_workspace_size = None
+
     _batch_invariant_MODE = False
     _batch_invariant_LIB = None
 
@@ -831,6 +899,9 @@ def override_envs_for_invariance():
     os.environ["NCCL_NTHREADS"] = "1"
     os.environ["NCCL_SOCKET_NTHREADS"] = "1"
 
+    # torch.compile settings
+    os.environ["VLLM_USE_AOT_COMPILE"] = "0"
+
 
 def init_batch_invariance():
     # this will hit all the csrc overrides as well
diff --git a/vllm/model_executor/layers/quantization/fp8.py b/vllm/model_executor/layers/quantization/fp8.py
index e5681cb85625..f82eccb88ce0 100644
--- a/vllm/model_executor/layers/quantization/fp8.py
+++ b/vllm/model_executor/layers/quantization/fp8.py
@@ -363,6 +363,7 @@ class Fp8LinearMethod(LinearMethodBase):
             self.use_marlin = False
 
         self.use_aiter_and_is_supported = check_aiter_fp8_linear_support()
+        self.use_deep_gemm = is_deep_gemm_supported()
 
         self.weight_block_size = self.quant_config.weight_block_size
         self.block_quant = self.weight_block_size is not None
@@ -545,8 +546,10 @@ class Fp8LinearMethod(LinearMethodBase):
         # if batch invariant mode is enabled, prefer DeepGEMM FP8 path
         # we will use BF16 dequant when DeepGEMM is not supported.
         if vllm_is_batch_invariant():
+            # Call is_deep_gemm_supported() ahead of time for torch.compile
+            # dynamo has trouble tracing through
             if self.block_quant and should_use_deepgemm_for_fp8_linear(
-                torch.bfloat16, layer.weight, None
+                torch.bfloat16, layer.weight, self.use_deep_gemm
             ):
                 # use group quant consistent with block size across K
                 assert self.act_q_group_shape is not None