diff --git a/.github/workflows/_build_test_publish_wheel.yml b/.github/workflows/_build_test_publish_wheel.yml
index 21e8d59f881..17c54104c23 100644
--- a/.github/workflows/_build_test_publish_wheel.yml
+++ b/.github/workflows/_build_test_publish_wheel.yml
@@ -74,7 +74,7 @@ jobs:
             rm LICENSE || true
             docker run --rm -e NO_VCS_VERSION=1 -v $(pwd):/workspace -w /workspace $IMAGE bash -c '\
               for python_version in cp311 cp312 cp313; do \
-                /opt/python/${python_version}-${python_version}/bin/pip install --upgrade "setuptools<80.0.0,>=77.0.0" build; \
+                /opt/python/${python_version}-${python_version}/bin/pip install --upgrade "setuptools>=80" build; \
               done && \
               for python_version in cp311 cp312 cp313; do \
                 /opt/python/${python_version}-${python_version}/bin/python -m build; \
diff --git a/docker/Dockerfile.ci.dev b/docker/Dockerfile.ci.dev
index bcb2e5940a9..377bd4a2005 100644
--- a/docker/Dockerfile.ci.dev
+++ b/docker/Dockerfile.ci.dev
@@ -97,7 +97,7 @@ RUN --mount=type=secret,id=JET_INDEX_URLS \
     JET_INDEX_URLS=$(cat /run/secrets/JET_INDEX_URLS)
     LOGGER_INDEX_URL=$(cat /run/secrets/LOGGER_INDEX_URL)
     uv pip install --no-cache-dir --upgrade $LOGGER_INDEX_URL "one-logger"
-    uv pip install --no-cache-dir --upgrade "setuptools<80.0.0,>=77.0.0"
+    uv pip install --no-cache-dir --upgrade "setuptools>=80"
     uv pip install --no-cache-dir --upgrade $JET_INDEX_URLS "jet-client~=4.0" 
 EOF
 ###
diff --git a/docker/common/install.sh b/docker/common/install.sh
index 01003c0e7aa..3991fd41448 100644
--- a/docker/common/install.sh
+++ b/docker/common/install.sh
@@ -136,7 +136,7 @@ main() {
         . $UV_PROJECT_ENVIRONMENT/bin/activate
 
         pip install --pre --no-cache-dir --upgrade pip
-        pip install --pre --no-cache-dir torch pybind11 wheel_stub ninja wheel packaging "setuptools<80.0.0,>=77.0.0"
+        pip install --pre --no-cache-dir torch pybind11 wheel_stub ninja wheel packaging "setuptools>=80"
         pip install --pre --no-cache-dir --no-build-isolation .
     fi
 
diff --git a/docker/common/install_source_wheels.sh b/docker/common/install_source_wheels.sh
index eaf601c6045..7eaaef2e46f 100644
--- a/docker/common/install_source_wheels.sh
+++ b/docker/common/install_source_wheels.sh
@@ -50,4 +50,4 @@ fi
 uv pip install --no-cache-dir \
     $MAMBA_WHEEL \
     $CAUSALCONV1D_WHEEL \
-    "setuptools<80.0.0,>=77.0.0"
+    "setuptools>=80"
diff --git a/megatron/core/distributed/fsdp/src/pyproject.toml b/megatron/core/distributed/fsdp/src/pyproject.toml
index 783030cc809..2845a14ab62 100644
--- a/megatron/core/distributed/fsdp/src/pyproject.toml
+++ b/megatron/core/distributed/fsdp/src/pyproject.toml
@@ -1,7 +1,7 @@
 # Copyright (c) 2023, NVIDIA CORPORATION.  All rights reserved.
 
 [build-system]
-requires = ["setuptools<80.0.0", "pybind11"]
+requires = ["setuptools>=80", "pybind11"]
 build-backend = "setuptools.build_meta"
 
 [tool.setuptools]
diff --git a/pyproject.toml b/pyproject.toml
index 506feb610ca..f91c2ee83b7 100644
--- a/pyproject.toml
+++ b/pyproject.toml
@@ -1,7 +1,7 @@
 # Copyright (c) 2023, NVIDIA CORPORATION.  All rights reserved.
 
 [build-system]
-requires = ["setuptools<80.0.0", "pybind11", "packaging>=24.2"]
+requires = ["setuptools>=80", "pybind11", "packaging>=24.2"]
 build-backend = "setuptools.build_meta"
 
 [tool.setuptools]
@@ -88,7 +88,7 @@ mlm = [
 ]
 
 dev = [
-    "nvidia-modelopt[torch]; sys_platform != 'darwin'",
+    "nvidia-modelopt[torch]>=0.43; sys_platform != 'darwin'",
     "nvidia-resiliency-ext",
     "tqdm",
     "einops~=0.8",
@@ -161,7 +161,7 @@ docs = [
     "nvidia-sphinx-theme", # Our NVIDIA theme
 ]
 build = [
-    "setuptools<80.0.0,>=77.0.0",
+    "setuptools>=80",
     "packaging>=24.2",
     "hatchling",
     "pybind11",
diff --git a/uv.lock b/uv.lock
index f481725d106..d68d392a0f2 100644
--- a/uv.lock
+++ b/uv.lock
@@ -1735,7 +1735,8 @@ source = { registry = "https://pypi.org/simple" }
 dependencies = [
     { name = "grpcio" },
     { name = "protobuf" },
-    { name = "setuptools" },
+    { name = "setuptools", version = "81.0.0", source = { registry = "https://pypi.org/simple" }, marker = "(sys_platform != 'emscripten' and sys_platform != 'win32' and extra == 'extra-13-megatron-core-dev') or (sys_platform == 'emscripten' and extra == 'extra-13-megatron-core-dev' and extra == 'extra-13-megatron-core-lts') or (sys_platform == 'win32' and extra == 'extra-13-megatron-core-dev' and extra == 'extra-13-megatron-core-lts')" },
+    { name = "setuptools", version = "82.0.1", source = { registry = "https://pypi.org/simple" }, marker = "(sys_platform == 'emscripten' and extra == 'extra-13-megatron-core-dev') or (sys_platform == 'win32' and extra == 'extra-13-megatron-core-dev') or (extra == 'extra-13-megatron-core-dev' and extra == 'extra-13-megatron-core-lts')" },
 ]
 sdist = { url = "https://files.pythonhosted.org/packages/94/c8/1223f29c84a143ae9a56c084fc96894de0ba84b6e8d60a26241abd81d278/grpcio_tools-1.80.0.tar.gz", hash = "sha256:26052b19c6ce0dcf52d1024496aea3e2bdfa864159f06dc7b97b22d041a94b26", size = 6133212, upload-time = "2026-03-30T08:52:39.077Z" }
 wheels = [
@@ -2429,7 +2430,8 @@ dependencies = [
     { name = "packaging", version = "25.0", source = { registry = "https://pypi.org/simple" }, marker = "extra == 'extra-13-megatron-core-dev'" },
     { name = "packaging", version = "26.2", source = { registry = "https://pypi.org/simple" }, marker = "extra == 'extra-13-megatron-core-lts' or extra != 'extra-13-megatron-core-dev'" },
     { name = "quack-kernels" },
-    { name = "setuptools" },
+    { name = "setuptools", version = "81.0.0", source = { registry = "https://pypi.org/simple" }, marker = "(sys_platform != 'emscripten' and sys_platform != 'win32') or (sys_platform == 'emscripten' and extra == 'extra-13-megatron-core-dev' and extra == 'extra-13-megatron-core-lts') or (sys_platform == 'win32' and extra == 'extra-13-megatron-core-dev' and extra == 'extra-13-megatron-core-lts')" },
+    { name = "setuptools", version = "82.0.1", source = { registry = "https://pypi.org/simple" }, marker = "sys_platform == 'emscripten' or sys_platform == 'win32' or (extra == 'extra-13-megatron-core-dev' and extra == 'extra-13-megatron-core-lts')" },
     { name = "tilelang" },
     { name = "torch", marker = "sys_platform == 'never' or (extra == 'extra-13-megatron-core-dev' and extra == 'extra-13-megatron-core-lts')" },
     { name = "transformers" },
@@ -2661,7 +2663,8 @@ build = [
     { name = "packaging", version = "25.0", source = { registry = "https://pypi.org/simple" }, marker = "extra == 'extra-13-megatron-core-dev'" },
     { name = "packaging", version = "26.2", source = { registry = "https://pypi.org/simple" }, marker = "extra == 'extra-13-megatron-core-lts' or extra != 'extra-13-megatron-core-dev'" },
     { name = "pybind11" },
-    { name = "setuptools" },
+    { name = "setuptools", version = "81.0.0", source = { registry = "https://pypi.org/simple" }, marker = "(sys_platform != 'emscripten' and sys_platform != 'win32') or (sys_platform == 'emscripten' and extra == 'extra-13-megatron-core-dev' and extra == 'extra-13-megatron-core-lts') or (sys_platform == 'win32' and extra == 'extra-13-megatron-core-dev' and extra == 'extra-13-megatron-core-lts')" },
+    { name = "setuptools", version = "82.0.1", source = { registry = "https://pypi.org/simple" }, marker = "sys_platform == 'emscripten' or sys_platform == 'win32' or (extra == 'extra-13-megatron-core-dev' and extra == 'extra-13-megatron-core-lts')" },
     { name = "torch", marker = "sys_platform == 'never' or (extra == 'extra-13-megatron-core-dev' and extra == 'extra-13-megatron-core-lts')" },
 ]
 ci = [
@@ -2733,7 +2736,7 @@ requires-dist = [
     { name = "multi-storage-client", marker = "extra == 'dev'", specifier = "~=0.27" },
     { name = "multi-storage-client", marker = "extra == 'lts'", specifier = "~=0.27" },
     { name = "numpy" },
-    { name = "nvidia-modelopt", extras = ["torch"], marker = "sys_platform != 'darwin' and extra == 'dev'" },
+    { name = "nvidia-modelopt", extras = ["torch"], marker = "sys_platform != 'darwin' and extra == 'dev'", specifier = ">=0.43" },
     { name = "nvidia-resiliency-ext", marker = "extra == 'dev'", git = "https://github.com/NVIDIA/nvidia-resiliency-ext.git?rev=b2bb3d728a18795807d9f76c535e005a609a1b01" },
     { name = "onnxscript", marker = "extra == 'dev'" },
     { name = "onnxscript", marker = "extra == 'lts'" },
@@ -2769,7 +2772,7 @@ build = [
     { name = "nvidia-mathdx" },
     { name = "packaging", specifier = ">=24.2" },
     { name = "pybind11" },
-    { name = "setuptools", specifier = ">=77.0.0,<80.0.0" },
+    { name = "setuptools", specifier = ">=80" },
     { name = "torch" },
 ]
 ci = [
@@ -3588,24 +3591,28 @@ wheels = [
 
 [[package]]
 name = "nvidia-modelopt"
-version = "0.42.0"
+version = "0.43.0"
 source = { registry = "https://pypi.org/simple" }
 dependencies = [
     { name = "ninja" },
     { name = "numpy", version = "2.0.2", source = { registry = "https://pypi.org/simple" } },
     { name = "nvidia-ml-py" },
+    { name = "omegaconf" },
     { name = "packaging", version = "25.0", source = { registry = "https://pypi.org/simple" } },
     { name = "pulp" },
     { name = "pydantic" },
+    { name = "pyyaml" },
     { name = "regex" },
     { name = "rich" },
     { name = "safetensors" },
     { name = "scipy" },
+    { name = "setuptools", version = "81.0.0", source = { registry = "https://pypi.org/simple" }, marker = "(sys_platform != 'emscripten' and sys_platform != 'win32' and extra == 'extra-13-megatron-core-dev') or (sys_platform == 'emscripten' and extra == 'extra-13-megatron-core-dev' and extra == 'extra-13-megatron-core-lts') or (sys_platform == 'win32' and extra == 'extra-13-megatron-core-dev' and extra == 'extra-13-megatron-core-lts')" },
+    { name = "setuptools", version = "82.0.1", source = { registry = "https://pypi.org/simple" }, marker = "(sys_platform == 'emscripten' and extra == 'extra-13-megatron-core-dev') or (sys_platform == 'win32' and extra == 'extra-13-megatron-core-dev') or (extra == 'extra-13-megatron-core-dev' and extra == 'extra-13-megatron-core-lts')" },
     { name = "torch", marker = "sys_platform == 'never'" },
     { name = "tqdm" },
 ]
 wheels = [
-    { url = "https://files.pythonhosted.org/packages/61/a4/ad7f8d4ce21e1df1670aaaa05db45bece34a74c9fb44e4e77f668a24adce/nvidia_modelopt-0.42.0-py3-none-any.whl", hash = "sha256:3e8149b4d206b4ae51165f4f6a6d28fc9c2172406c948d5abcd8637b08db5c28", size = 1005332, upload-time = "2026-03-09T20:43:57.936Z" },
+    { url = "https://files.pythonhosted.org/packages/01/4e/c0ec675bb74ee8bf1b10f1c9ab2a722a082d83a81c94f4fa7d7659cd40cb/nvidia_modelopt-0.43.0-py3-none-any.whl", hash = "sha256:fe11a49e16230435b3a17153bcdb5717b2859a61544cdbe9dcb3f062ba2c203a", size = 1196533, upload-time = "2026-04-16T19:45:10.876Z" },
 ]
 
 [[package]]
@@ -5992,11 +5999,42 @@ wheels = [
 
 [[package]]
 name = "setuptools"
-version = "79.0.1"
+version = "81.0.0"
+source = { registry = "https://pypi.org/simple" }
+resolution-markers = [
+    "python_full_version >= '3.14' and platform_machine != 's390x' and sys_platform != 'emscripten' and sys_platform != 'win32'",
+    "python_full_version >= '3.14' and platform_machine == 's390x' and sys_platform != 'emscripten' and sys_platform != 'win32'",
+    "python_full_version == '3.13.*' and platform_machine != 's390x' and sys_platform != 'emscripten' and sys_platform != 'win32'",
+    "python_full_version == '3.13.*' and platform_machine == 's390x' and sys_platform != 'emscripten' and sys_platform != 'win32'",
+    "python_full_version < '3.13' and platform_machine != 's390x' and sys_platform != 'emscripten' and sys_platform != 'win32'",
+    "python_full_version < '3.13' and platform_machine == 's390x' and sys_platform != 'emscripten' and sys_platform != 'win32'",
+]
+sdist = { url = "https://files.pythonhosted.org/packages/0d/1c/73e719955c59b8e424d015ab450f51c0af856ae46ea2da83eba51cc88de1/setuptools-81.0.0.tar.gz", hash = "sha256:487b53915f52501f0a79ccfd0c02c165ffe06631443a886740b91af4b7a5845a", size = 1198299, upload-time = "2026-02-06T21:10:39.601Z" }
+wheels = [
+    { url = "https://files.pythonhosted.org/packages/e1/e3/c164c88b2e5ce7b24d667b9bd83589cf4f3520d97cad01534cd3c4f55fdb/setuptools-81.0.0-py3-none-any.whl", hash = "sha256:fdd925d5c5d9f62e4b74b30d6dd7828ce236fd6ed998a08d81de62ce5a6310d6", size = 1062021, upload-time = "2026-02-06T21:10:37.175Z" },
+]
+
+[[package]]
+name = "setuptools"
+version = "82.0.1"
 source = { registry = "https://pypi.org/simple" }
-sdist = { url = "https://files.pythonhosted.org/packages/bb/71/b6365e6325b3290e14957b2c3a804a529968c77a049b2ed40c095f749707/setuptools-79.0.1.tar.gz", hash = "sha256:128ce7b8f33c3079fd1b067ecbb4051a66e8526e7b65f6cec075dfc650ddfa88", size = 1367909, upload-time = "2025-04-23T22:20:59.241Z" }
+resolution-markers = [
+    "python_full_version >= '3.14' and platform_machine != 's390x' and sys_platform == 'win32'",
+    "python_full_version >= '3.14' and platform_machine == 's390x' and sys_platform == 'win32'",
+    "python_full_version >= '3.14' and platform_machine != 's390x' and sys_platform == 'emscripten'",
+    "python_full_version >= '3.14' and platform_machine == 's390x' and sys_platform == 'emscripten'",
+    "python_full_version == '3.13.*' and platform_machine != 's390x' and sys_platform == 'win32'",
+    "python_full_version == '3.13.*' and platform_machine == 's390x' and sys_platform == 'win32'",
+    "python_full_version < '3.13' and platform_machine != 's390x' and sys_platform == 'win32'",
+    "python_full_version < '3.13' and platform_machine == 's390x' and sys_platform == 'win32'",
+    "python_full_version == '3.13.*' and platform_machine != 's390x' and sys_platform == 'emscripten'",
+    "python_full_version == '3.13.*' and platform_machine == 's390x' and sys_platform == 'emscripten'",
+    "python_full_version < '3.13' and platform_machine != 's390x' and sys_platform == 'emscripten'",
+    "python_full_version < '3.13' and platform_machine == 's390x' and sys_platform == 'emscripten'",
+]
+sdist = { url = "https://files.pythonhosted.org/packages/4f/db/cfac1baf10650ab4d1c111714410d2fbb77ac5a616db26775db562c8fab2/setuptools-82.0.1.tar.gz", hash = "sha256:7d872682c5d01cfde07da7bccc7b65469d3dca203318515ada1de5eda35efbf9", size = 1152316, upload-time = "2026-03-09T12:47:17.221Z" }
 wheels = [
-    { url = "https://files.pythonhosted.org/packages/0d/6d/b4752b044bf94cb802d88a888dc7d288baaf77d7910b7dedda74b5ceea0c/setuptools-79.0.1-py3-none-any.whl", hash = "sha256:e147c0549f27767ba362f9da434eab9c5dc0045d5304feb602a0af001089fc51", size = 1256281, upload-time = "2025-04-23T22:20:56.768Z" },
+    { url = "https://files.pythonhosted.org/packages/9d/76/f789f7a86709c6b087c5a2f52f911838cad707cc613162401badc665acfe/setuptools-82.0.1-py3-none-any.whl", hash = "sha256:a59e362652f08dcd477c78bb6e7bd9d80a7995bc73ce773050228a348ce2e5bb", size = 1006223, upload-time = "2026-03-09T12:47:15.026Z" },
 ]
 
 [[package]]
@@ -6344,7 +6382,8 @@ dependencies = [
     { name = "packaging", version = "26.2", source = { registry = "https://pypi.org/simple" }, marker = "extra == 'extra-13-megatron-core-lts' or extra != 'extra-13-megatron-core-dev'" },
     { name = "pillow" },
     { name = "protobuf" },
-    { name = "setuptools" },
+    { name = "setuptools", version = "81.0.0", source = { registry = "https://pypi.org/simple" }, marker = "(sys_platform != 'emscripten' and sys_platform != 'win32') or (sys_platform == 'emscripten' and extra == 'extra-13-megatron-core-dev' and extra == 'extra-13-megatron-core-lts') or (sys_platform == 'win32' and extra == 'extra-13-megatron-core-dev' and extra == 'extra-13-megatron-core-lts')" },
+    { name = "setuptools", version = "82.0.1", source = { registry = "https://pypi.org/simple" }, marker = "sys_platform == 'emscripten' or sys_platform == 'win32' or (extra == 'extra-13-megatron-core-dev' and extra == 'extra-13-megatron-core-lts')" },
     { name = "tensorboard-data-server" },
     { name = "werkzeug" },
 ]
@@ -6547,7 +6586,7 @@ dependencies = [
     { name = "numpy", version = "2.0.2", source = { registry = "https://pypi.org/simple" }, marker = "extra == 'extra-13-megatron-core-dev'" },
     { name = "numpy", version = "2.4.4", source = { registry = "https://pypi.org/simple" }, marker = "extra == 'extra-13-megatron-core-lts' or extra != 'extra-13-megatron-core-dev'" },
     { name = "psutil" },
-    { name = "setuptools", marker = "sys_platform == 'darwin' or (extra == 'extra-13-megatron-core-dev' and extra == 'extra-13-megatron-core-lts')" },
+    { name = "setuptools", version = "81.0.0", source = { registry = "https://pypi.org/simple" }, marker = "sys_platform == 'darwin' or (extra == 'extra-13-megatron-core-dev' and extra == 'extra-13-megatron-core-lts')" },
     { name = "torch", marker = "sys_platform == 'never' or (extra == 'extra-13-megatron-core-dev' and extra == 'extra-13-megatron-core-lts')" },
     { name = "torch-c-dlpack-ext", marker = "python_full_version < '3.14' or (extra == 'extra-13-megatron-core-dev' and extra == 'extra-13-megatron-core-lts')" },
     { name = "tqdm" },
@@ -6620,7 +6659,7 @@ dependencies = [
     { name = "nvidia-cusparselt-cu13", marker = "sys_platform == 'linux'" },
     { name = "nvidia-nccl-cu13", marker = "sys_platform == 'linux'" },
     { name = "nvidia-nvshmem-cu13", marker = "sys_platform == 'linux'" },
-    { name = "setuptools", marker = "sys_platform != 'emscripten' and sys_platform != 'win32'" },
+    { name = "setuptools", version = "81.0.0", source = { registry = "https://pypi.org/simple" }, marker = "sys_platform != 'emscripten' and sys_platform != 'win32'" },
     { name = "sympy", marker = "sys_platform != 'emscripten' and sys_platform != 'win32'" },
     { name = "triton", marker = "sys_platform == 'never'" },
     { name = "typing-extensions", marker = "sys_platform != 'emscripten' and sys_platform != 'win32'" },