How to Build a Privacy-Preserving Federated Pipeline to Fine-Tune Large Language Models with LoRA Using Flower and PEFT

!pip -q install -U "protobuf<5" "flwr[simulation]" transformers peft accelerate datasets sentencepiece
import torch
if torch.cuda.is_available():
   !pip -q install -U bitsandbytes
import os
os.environ["RAY_DISABLE_USAGE_STATS"] = "1"
os.environ["TOKENIZERS_PARALLELISM"] = "false"
import math
import random
import numpy as np
from typing import Dict, List, Tuple, Optional
from torch.utils.data import DataLoader
from datasets import Dataset
import flwr as fl
from flwr.common import Context
from transformers import AutoTokenizer, AutoModelForCausalLM, BitsAndBytesConfig, DataCollatorForLanguageModeling
from peft import LoraConfig, get_peft_model, prepare_model_for_kbit_training
SEED = 7
random.seed(SEED)
np.random.seed(SEED)
torch.manual_seed(SEED)
torch.cuda.manual_seed_all(SEED)
DEVICE = "cuda" if torch.cuda.is_available() else "cpu"
print("Device:", DEVICE)
GPU_MODEL_ID = "TinyLlama/TinyLlama-1.1B-Chat-v1.0"
CPU_MODEL_ID = "distilgpt2"
MODEL_ID = GPU_MODEL_ID if DEVICE == "cuda" else CPU_MODEL_ID
MAX_LEN = 256 if DEVICE == "cuda" else 192
NUM_CLIENTS = 3
ROUNDS = 3
LOCAL_EPOCHS = 1
BATCH_SIZE = 2
GRAD_ACCUM = 4
LR = 2e-4
WARMUP_STEPS = 5
WEIGHT_DECAY = 0.0
LOG_EVERY = 10
CLIENT_TEXTS: Dict[int, List[str]] = {
   0: [
       "Policy memo: Employees must rotate on-call weekly and document incidents in the internal tracker.",
       "Runbook: If latency spikes, check the database connection pool and recent deploys, then roll back if needed.",
       "Security note: Never paste customer identifiers into public issue trackers. Use redacted tokens.",
       "Engineering guideline: Prefer idempotent retries for event processing; avoid duplicate side-effects.",
       "Postmortem template: impact, timeline, root cause, contributing factors, action items, owners, deadlines."
   ],
   1: [
       "Credit risk review: monitor delinquency curves by cohort and compare against seasonal baselines.",
       "Fraud signals: repeated small authorizations, device changes, and sudden merchant-category shifts require review.",
       "Portfolio strategy: tighten limits on volatile segments while maintaining service levels for stable accounts.",
       "Operational note: reconcile chargebacks weekly and track win-rate by reason code.",
       "Internal SOP: escalation path is analyst -> manager -> compliance for high-risk cases."
   ],
   2: [
       "Fleet ops: preventive maintenance reduces downtime; prioritize vehicles with repeated fault codes.",
       "Dispatch note: optimize routes by time windows and driver hours to reduce empty miles.",
       "Safety policy: enforce rest breaks and log inspections before long-haul trips.",
       "Inventory update: track spare parts usage; reorder thresholds should reflect lead time and seasonality.",
       "Customer SLA: late deliveries require proactive notifications and documented root cause."
   ],
}
for cid in list(CLIENT_TEXTS.keys()):
   base = CLIENT_TEXTS[cid]
   CLIENT_TEXTS[cid] = base + [f"Q: Summarize this for leadership. A: {t}" for t in base]
tokenizer = AutoTokenizer.from_pretrained(MODEL_ID, use_fast=True)
if tokenizer.pad_token is None:
   tokenizer.pad_token = tokenizer.eos_token
bnb_config: Optional[BitsAndBytesConfig] = None
if DEVICE == "cuda":
   compute_dtype = torch.bfloat16 if torch.cuda.get_device_capability(0)[0] >= 8 else torch.float16
   bnb_config = BitsAndBytesConfig(load_in_4bit=True, bnb_4bit_quant_type="nf4", bnb_4bit_use_double_quant=True, bnb_4bit_compute_dtype=compute_dtype)
if "gpt2" in MODEL_ID.lower():
   TARGET_MODULES = ["c_attn", "c_proj"]
else:
   TARGET_MODULES = ["q_proj", "k_proj", "v_proj", "o_proj"]
LORA_R = 16
LORA_ALPHA = 32
LORA_DROPOUT = 0.05
lora_config = LoraConfig(r=LORA_R, lora_alpha=LORA_ALPHA, lora_dropout=LORA_DROPOUT, bias="none", task_type="CAUSAL_LM", target_modules=TARGET_MODULES)
def model_primary_device(model) -> torch.device:
   return next(model.parameters()).device
def build_model_with_lora():
   if DEVICE == "cuda":
       model = AutoModelForCausalLM.from_pretrained(MODEL_ID, device_map="auto", quantization_config=bnb_config, torch_dtype="auto")
       model = prepare_model_for_kbit_training(model)
   else:
       model = AutoModelForCausalLM.from_pretrained(MODEL_ID, torch_dtype=torch.float32)
       model.to("cpu")
   model = get_peft_model(model, lora_config)
   model.train()
   return model
def make_dataset(texts: List[str]) -> Dataset:
   ds = Dataset.from_dict({"text": texts})
   def tok(batch):
       return tokenizer(batch["text"], truncation=True, max_length=MAX_LEN, padding="max_length")
   ds = ds.map(tok, batched=True, remove_columns=["text"])
   return ds
collator = DataCollatorForLanguageModeling(tokenizer=tokenizer, mlm=False)
def lora_state_keys(model) -> List[str]:
   sd = model.state_dict()
   keys = sorted([k for k in sd.keys() if "lora_" in k])
   if not keys:
       raise RuntimeError("No LoRA keys found. Your model might not have the target_modules specified. " f"Current TARGET_MODULES={TARGET_MODULES}, MODEL_ID={MODEL_ID}")
   return keys
def get_lora_ndarrays(model) -> List[np.ndarray]:
   sd = model.state_dict()
   keys = lora_state_keys(model)
   return [sd[k].detach().float().cpu().numpy() for k in keys]
def set_lora_ndarrays(model, arrays: List[np.ndarray]) -> None:
   keys = lora_state_keys(model)
   if len(keys) != len(arrays):
       raise ValueError(f"Mismatch: got {len(arrays)} arrays but expected {len(keys)}.")
   sd = model.state_dict()
   for k, arr in zip(keys, arrays):
       t = torch.from_numpy(arr).to(sd[k].device).to(sd[k].dtype)
       sd[k].copy_(t)
def cosine_warmup_lr(step: int, total_steps: int, base_lr: float, warmup_steps: int) -> float:
   if step < warmup_steps:
       return base_lr * (step + 1) / max(1, warmup_steps)
   progress = (step - warmup_steps) / max(1, total_steps - warmup_steps)
   return base_lr * 0.5 * (1.0 + math.cos(math.pi * progress))
@torch.no_grad()
def eval_loss(model, ds: Dataset, max_batches: int = 20) -> float:
   model.eval()
   dl = DataLoader(ds, batch_size=BATCH_SIZE, shuffle=False, collate_fn=collator)
   losses = []
   dev = model_primary_device(model)
   for i, batch in enumerate(dl):
       if i >= max_batches:
           break
       batch = {k: v.to(dev) for k, v in batch.items()}
       out = model(**batch, labels=batch["input_ids"])
       losses.append(float(out.loss.detach().cpu()))
   model.train()
   return float(np.mean(losses)) if losses else float("nan")
def train_one_client_round(model, ds: Dataset, epochs: int, lr: float, grad_accum: int, warmup_steps: int) -> Tuple[float, int]:
   dl = DataLoader(ds, batch_size=BATCH_SIZE, shuffle=True, collate_fn=collator)
   total_steps = max(1, (len(dl) * epochs) // max(1, grad_accum))
   step = 0
   optimizer = torch.optim.AdamW(model.parameters(), lr=lr, weight_decay=WEIGHT_DECAY)
   optimizer.zero_grad(set_to_none=True)
   running = []
   examples = 0
   dev = model_primary_device(model)
   for _ in range(epochs):
       for bi, batch in enumerate(dl):
           batch = {k: v.to(dev) for k, v in batch.items()}
           out = model(**batch, labels=batch["input_ids"])
           loss = out.loss / grad_accum
           loss.backward()
           running.append(float(loss.detach().cpu()) * grad_accum)
           examples += batch["input_ids"].shape[0]
           if (bi + 1) % grad_accum == 0:
               lr_t = cosine_warmup_lr(step, total_steps, lr, warmup_steps)
               for pg in optimizer.param_groups:
                   pg["lr"] = lr_t
               optimizer.step()
               optimizer.zero_grad(set_to_none=True)
               step += 1
               if step % LOG_EVERY == 0:
                   print(f"  step={step}/{total_steps} loss={np.mean(running[-LOG_EVERY:]):.4f} lr={lr_t:.2e}")
   return float(np.mean(running)) if running else float("nan"), examples