diff --git a/optimum/tpu/static_cache_xla.py b/optimum/tpu/static_cache_xla.py
new file mode 100644
index 00000000..9194215a
--- /dev/null
+++ b/optimum/tpu/static_cache_xla.py
@@ -0,0 +1,60 @@
+from typing import Any, Dict, Optional, Tuple
+
+import torch
+from transformers import StaticCache
+
+
+class StaticCacheXla(StaticCache):
+    def update(
+        self,
+        key_states: torch.Tensor,
+        value_states: torch.Tensor,
+        layer_idx: int,
+        cache_kwargs: Optional[Dict[str, Any]] = None,
+    ) -> Tuple[torch.Tensor, torch.Tensor]:
+        """
+        Updates the cache with the new `key_states` and `value_states` for the layer `layer_idx`.
+        It is VERY important to index using a tensor, otherwise you introduce a copy to the device.
+
+        Parameters:
+            key_states (`torch.Tensor`):
+                The new key states to cache.
+            value_states (`torch.Tensor`):
+                The new value states to cache.
+            layer_idx (`int`):
+                The index of the layer to cache the states for.
+            cache_kwargs (`Dict[str, Any]`, `optional`):
+                Additional arguments for the cache subclass. The `StaticCache` needs the `cache_position` input
+                to know how where to write in the cache.
+
+        Return:
+            A tuple containing the updated key and value states.
+        """
+        cache_position = cache_kwargs.get("cache_position")
+        k_out = self.key_cache[layer_idx]
+        v_out = self.value_cache[layer_idx]
+
+        # `index_copy_(dim, index, source)` functions similarly to `tensor[index] = source`,
+        # but it is used for better generality and it uses less memory on XLA.
+        # For more information, refer to: https://pytorch.org/cppdocs/notes/tensor_indexing.html
+        k_out.index_copy_(2, cache_position, key_states)
+        v_out.index_copy_(2, cache_position, value_states)
+
+        return k_out, v_out
+
+
+    def get_seq_length(self, layer_idx: Optional[int] = 0) -> int:
+        """Returns the sequence length of the cached states that were seen by the model."""
+        # Occupied cache == any slot in the 3rd dim (sequence length) holds a non-zero value. To save on compute, let's
+        # limit the check to the first batch member and head dimension.
+        # TODO: deprecate this function in favor of `cache_position`
+        key_cache = self.key_cache[layer_idx]
+        device = key_cache.device
+
+        # index_select(dim, index) performs the same operation as item = tensor[..., index, ...]
+        # but it is used for better generality and it uses less memory on XLA.
+        # For more information, refer to: https://pytorch.org/cppdocs/notes/tensor_indexing.html
+        item = key_cache.index_select(0, torch.tensor(0, device=device))
+        head = item.index_select(1, torch.tensor(0, device=device))
+
+        return head.any(dim=-1).sum()
diff --git a/text-generation-inference/server/text_generation_server/generator.py b/text-generation-inference/server/text_generation_server/generator.py
index 58756d96..245ee64a 100644
--- a/text-generation-inference/server/text_generation_server/generator.py
+++ b/text-generation-inference/server/text_generation_server/generator.py
@@ -12,12 +12,13 @@
 import torch.multiprocessing as mp
 import torch_xla.core.xla_model as xm
 import torch_xla.distributed.xla_multiprocessing as xmp
-from transformers import AutoTokenizer, PreTrainedTokenizerBase, StaticCache
+from transformers import AutoTokenizer, PreTrainedTokenizerBase
 from transformers.generation import GenerationConfig
 
 import optimum.tpu.xla_logger as logger
 from optimum.tpu import AutoModelForCausalLM
 from optimum.tpu.generation import TokenSelector
+from optimum.tpu.static_cache_xla import StaticCacheXla
 from optimum.tpu.xla_mp_comm import AgentMailbox, RootMailbox
 
 from .generator_base import Generator
@@ -529,7 +530,7 @@ def prefill(self, batch: Batch) -> Tuple[List[Generation], CachedBatch]:
 
         extra_args = {}
         if self._supports_static_cache:
-            self.past_key_values = StaticCache(
+            self.past_key_values = StaticCacheXla(
                 config=self.model.config,
                 max_batch_size=len(self.slots),
                 max_cache_len=self.model.config.sequence_length,