diff --git a/CHANGELOG.md b/CHANGELOG.md
index a2ea14b23d166..8a20ee5914854 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -20,6 +20,7 @@ The format is based on [Keep a Changelog](http://keepachangelog.com/en/1.0.0/).
 - Fixed error on TPUs when there was no `ModelCheckpoint` ([#6654](https://github.com/PyTorchLightning/pytorch-lightning/pull/6654))
 - Fixed `trainer.test` freeze on TPUs ([#6654](https://github.com/PyTorchLightning/pytorch-lightning/pull/6654))
 - Fixed a bug where gradients were disabled after calling `Trainer.predict` ([#6657](https://github.com/PyTorchLightning/pytorch-lightning/pull/6657))
+- Fixed bug where no TPUs were detected in a TPU pod env ([#6719](https://github.com/PyTorchLightning/pytorch-lightning/pull/6719))
 
 
 ## [1.2.5] - 2021-03-23
diff --git a/pytorch_lightning/utilities/__init__.py b/pytorch_lightning/utilities/__init__.py
index cf3aa06f305b8..e24e4a0db560a 100644
--- a/pytorch_lightning/utilities/__init__.py
+++ b/pytorch_lightning/utilities/__init__.py
@@ -14,7 +14,6 @@
 """General utilities"""
 
 import numpy
-
 from pytorch_lightning.utilities.apply_func import move_data_to_device  # noqa: F401
 from pytorch_lightning.utilities.distributed import (  # noqa: F401
     AllGatherGrad,
diff --git a/pytorch_lightning/utilities/xla_device.py b/pytorch_lightning/utilities/xla_device.py
index fcf56e9c679f4..294d3d2c5ec40 100644
--- a/pytorch_lightning/utilities/xla_device.py
+++ b/pytorch_lightning/utilities/xla_device.py
@@ -12,18 +12,21 @@
 # See the License for the specific language governing permissions and
 # limitations under the License.
 import functools
+import os
 import queue as q
 import traceback
 from multiprocessing import Process, Queue
 
-import torch
+import torch.multiprocessing as mp
 
 from pytorch_lightning.utilities.imports import _XLA_AVAILABLE
 
 if _XLA_AVAILABLE:
     import torch_xla.core.xla_model as xm
+    import torch_xla.distributed.xla_multiprocessing as xmp
+
 #: define waiting time got checking TPU available in sec
-TPU_CHECK_TIMEOUT = 100
+TPU_CHECK_TIMEOUT = 25
 
 
 def inner_f(queue, func, *args, **kwargs):  # pragma: no cover
@@ -55,23 +58,10 @@ def wrapper(*args, **kwargs):
 class XLADeviceUtils:
     """Used to detect the type of XLA device"""
 
-    TPU_AVAILABLE = None
-
-    @staticmethod
-    def _fetch_xla_device_type(device: torch.device) -> str:
-        """
-        Returns XLA device type
-
-        Args:
-            device: (:class:`~torch.device`): Accepts a torch.device type with a XLA device format i.e xla:0
-
-        Return:
-            Returns a str of the device hardware type. i.e TPU
-        """
-        if _XLA_AVAILABLE:
-            return xm.xla_device_hw(device)
+    _TPU_AVAILABLE = False
 
     @staticmethod
+    @pl_multi_process
     def _is_device_tpu() -> bool:
         """
         Check if device is TPU
@@ -79,10 +69,18 @@ def _is_device_tpu() -> bool:
         Return:
             A boolean value indicating if the xla device is a TPU device or not
         """
-        if _XLA_AVAILABLE:
-            device = xm.xla_device()
-            device_type = XLADeviceUtils._fetch_xla_device_type(device)
-            return device_type == "TPU"
+
+        def _fn(_: int, mp_queue):
+            try:
+                device = xm.xla_device()
+                mp_queue.put(device.type == 'xla')
+            except Exception:
+                mp_queue.put(False)
+
+        smp = mp.get_context("spawn")
+        queue = smp.SimpleQueue()
+        xmp.spawn(_fn, args=(queue, ), nprocs=1)
+        return queue.get()
 
     @staticmethod
     def xla_available() -> bool:
@@ -102,6 +100,14 @@ def tpu_device_exists() -> bool:
         Return:
             A boolean value indicating if a TPU device exists on the system
         """
-        if XLADeviceUtils.TPU_AVAILABLE is None and _XLA_AVAILABLE:
-            XLADeviceUtils.TPU_AVAILABLE = pl_multi_process(XLADeviceUtils._is_device_tpu)()
-        return XLADeviceUtils.TPU_AVAILABLE
+        if os.getenv("PL_TPU_AVAILABLE", '0') == "1":
+            XLADeviceUtils._TPU_AVAILABLE = True
+
+        if XLADeviceUtils.xla_available() and not XLADeviceUtils._TPU_AVAILABLE:
+
+            XLADeviceUtils._TPU_AVAILABLE = XLADeviceUtils._is_device_tpu()
+
+            if XLADeviceUtils._TPU_AVAILABLE:
+                os.environ["PL_TPU_AVAILABLE"] = '1'
+
+        return XLADeviceUtils._TPU_AVAILABLE
diff --git a/tests/plugins/test_custom_plugin.py b/tests/plugins/test_custom_plugin.py
index 872b49ef48635..b0407d1fca6b2 100644
--- a/tests/plugins/test_custom_plugin.py
+++ b/tests/plugins/test_custom_plugin.py
@@ -11,6 +11,9 @@
 # WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
 # See the License for the specific language governing permissions and
 # limitations under the License.
+import pytest
+import torch
+
 from pytorch_lightning import Trainer
 from pytorch_lightning.plugins import DDPPlugin
 from tests.helpers import BoringModel
@@ -26,6 +29,7 @@ def __init__(self, **kwargs):
 
 
 @RunIf(skip_windows=True)
+@pytest.mark.skipif(torch.cuda.is_available(), reason="RuntimeError: Tensors must be CUDA and dense")
 def test_sync_batchnorm_set(tmpdir):
     """Tests if sync_batchnorm is automatically set for custom plugin."""
     model = BoringModel()
diff --git a/tests/utilities/test_xla_device_utils.py b/tests/utilities/test_xla_device_utils.py
index 73b11b48267ce..edca2777b578a 100644
--- a/tests/utilities/test_xla_device_utils.py
+++ b/tests/utilities/test_xla_device_utils.py
@@ -17,29 +17,37 @@
 import pytest
 
 import pytorch_lightning.utilities.xla_device as xla_utils
-from pytorch_lightning.utilities import _TPU_AVAILABLE, _XLA_AVAILABLE
-from tests.helpers.utils import pl_multi_process_test
+from pytorch_lightning.utilities import _XLA_AVAILABLE
+from tests.helpers.runif import RunIf
 
 
 @pytest.mark.skipif(_XLA_AVAILABLE, reason="test requires torch_xla to be absent")
 def test_tpu_device_absence():
-    """Check tpu_device_exists returns None when torch_xla is not available"""
-    assert xla_utils.XLADeviceUtils.tpu_device_exists() is None
+    """Check tpu_device_exists returns False when torch_xla is not available"""
+    assert not xla_utils.XLADeviceUtils.tpu_device_exists()
 
 
-@pytest.mark.skipif(not _TPU_AVAILABLE, reason="test requires torch_xla to be installed")
-@pl_multi_process_test
+@RunIf(tpu=True)
 def test_tpu_device_presence():
     """Check tpu_device_exists returns True when TPU is available"""
-    assert xla_utils.XLADeviceUtils.tpu_device_exists() is True
+    assert xla_utils.XLADeviceUtils.tpu_device_exists()
 
 
-@patch('pytorch_lightning.utilities.xla_device.TPU_CHECK_TIMEOUT', 10)
+def sleep_fn(sleep_time: float) -> bool:
+    time.sleep(sleep_time)
+    return True
+
+
+@patch('pytorch_lightning.utilities.xla_device.TPU_CHECK_TIMEOUT', 3)
+@pytest.mark.skipif(not _XLA_AVAILABLE, reason="test requires torch_xla to be present")
 def test_result_returns_within_timeout_seconds():
-    """Check that pl_multi_process returns within 10 seconds"""
+    """Check that pl_multi_process returns within 3 seconds"""
+    fn = xla_utils.pl_multi_process(sleep_fn)
+
     start = time.time()
-    result = xla_utils.pl_multi_process(time.sleep)(xla_utils.TPU_CHECK_TIMEOUT * 1.25)
+    result = fn(xla_utils.TPU_CHECK_TIMEOUT * 0.5)
     end = time.time()
     elapsed_time = int(end - start)
+
     assert elapsed_time <= xla_utils.TPU_CHECK_TIMEOUT
-    assert result is False
+    assert result