We continue the investigation into the power of smaller Transformer-based language models as initiated byTinyStories– a 10 million parameter model that can produce coherent English – and the follow-up work onphi-1, a 1.3 billion parameter model with Python coding performance close to the state-of-the-art. The latter work proposed to use existing Large Language Models (LLMs)  to generate “textbook quality” data as a way to enhance the learning process compared to traditional web data. We follow the “Textbooks Are All You Need” approach, focusing this time on common sense reasoning in natural language, and create a new 1.3 billion parameter model namedphi-1.5, with performance on natural language tasks comparable to models 5x larger, and surpassing most non-frontier LLMs on more complex reasoning tasks such as grade-school mathematics and basic coding. More generally,phi-1.5exhibits many of the traits of much larger LLMs, both good –such as the ability to “think step by step” or perform some rudimentary in-context learning– and bad, including hallucinations and the potential for toxic and biased generations –encouragingly though, we are seeing improvement on that front thanks to the absence of web data. We open-sourcephi-1.5to promote further research on these urgent topics.