Add document section explaining autocast nesting (#7883)

Add a document section clarifying the behavior of nesting autocast and
why/when we need it.

---------

Signed-off-by: Masahiro Tanaka <mtanaka@anyscale.com>
Co-authored-by: Stas Bekman <stas00@users.noreply.github.com>
Signed-off-by: nathon-lee <leejianwoo@gmail.com>

Author: 2 people

docs/code-docs/source/training.rst

@@ -119,6 +119,35 @@ If you call ``loss.backward()`` directly without using ``engine.scale()`` or ``e
 will raise a ``RuntimeError`` to prevent training with unscaled gradients, which can lead to incorrect results
 or gradient underflow.
 
+Using torch.autocast Outside the Engine
+^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
+
+DeepSpeed applies ``torch.autocast`` internally during ``engine.forward()``.
+However, you may also want autocast to cover code that runs **outside** the engine,
+such as a loss function or post-processing logic. In that case, wrap the entire
+forward-plus-loss block in your own ``torch.autocast`` context:
+
+.. code-block:: python
+
+    # Autocast covers both the engine forward AND the loss computation
+    with torch.autocast(device_type="cuda", dtype=torch.bfloat16):
+        logits = model_engine(input_ids)
+        loss = loss_fn(logits.view(-1, vocab_size), labels.view(-1))
+
+Without the outer ``torch.autocast``, only the model's forward pass benefits from
+autocast; the loss function would run in full precision.
+
+When DeepSpeed detects a nested autocast context, it handles it as follows:
+
+* If ``torch_autocast`` is **enabled** in the DeepSpeed config, the engine overrides the
+  outer context with the dtype from the config. An info message is logged once.
+* If ``torch_autocast`` is **disabled** in the config (i.e., you are using DeepSpeed's
+  built-in bf16/fp16 support instead), the engine disables autocast inside
+  ``engine.forward()`` and a warning is logged once.
+
+In both cases, PyTorch's ``torch.autocast`` is idempotent when nested with the same
+dtype, so there is no performance or correctness penalty from the nesting.
+
 .. autofunction:: deepspeed.runtime.torch_autocast.init_autocast_params
 .. autofunction:: deepspeed.runtime.torch_autocast.is_autocast_initialized
 .. autofunction:: deepspeed.runtime.torch_autocast.get_default_autocast_lower_precision_modules