diff --git a/litellm/proxy/proxy_server.py b/litellm/proxy/proxy_server.py
index 9eb2bc93391..01048f35929 100644
--- a/litellm/proxy/proxy_server.py
+++ b/litellm/proxy/proxy_server.py
@@ -10012,6 +10012,7 @@ def _pop_complete_sse_frame(buffer: str) -> tuple[str | None, str]:
 _STREAM_KEEPALIVE: Final = object()
 
 _KEEPALIVE_MIN_SECONDS: Final = 1.0
+_STREAM_LOOP_HOLD_SECONDS: Final = 0.05
 _KEEPALIVE_MAX_SECONDS: Final = 300.0
 _EMPTY_MAPPING: Final[Mapping[str, object]] = MappingProxyType({})
 _EMPTY_HEADERS: Final[Mapping[str, str]] = MappingProxyType({})
@@ -10224,6 +10225,7 @@ async def async_data_generator(
     request: Request | None = None,
     *,
     responses_stream_errors: bool = False,
+    now: Callable[[], float] = time.monotonic,
 ):
     verbose_proxy_logger.debug("inside generator")
     stream_completed = False
@@ -10287,7 +10289,11 @@ async def async_data_generator(
             else stream_iterator
         )
 
+        loop_released_at = now()  # rebind-ok: last time this stream let the event loop run other tasks
         async for item in stream_source:
+            if now() - loop_released_at >= _STREAM_LOOP_HOLD_SECONDS:
+                await asyncio.sleep(0)
+                loop_released_at = now()
             if item is _STREAM_KEEPALIVE:
                 yield ": ping\n\n"
                 continue
diff --git a/tests/unit/proxy/proxy_server/test_streaming_helpers.py b/tests/unit/proxy/proxy_server/test_streaming_helpers.py
index 09d71cb4ead..9908d698a53 100644
--- a/tests/unit/proxy/proxy_server/test_streaming_helpers.py
+++ b/tests/unit/proxy/proxy_server/test_streaming_helpers.py
@@ -2090,3 +2090,36 @@ def test_fast_serialize_simple_model_response_stream_keeps_served_service_tier()
 
     assert result is not None
     assert json.loads(result)["service_tier"] == "priority"
+
+
+@pytest.mark.asyncio
+async def test_async_data_generator_lets_other_tasks_run_during_a_stream_that_never_waits(monkeypatch):
+    """A stream whose chunks are already buffered never suspends on its own, so
+    the generator has to hand the loop back on its own: another task must get
+    to run before the stream is over, and once the hold budget has been used
+    up, not on every chunk."""
+    _patch_logging_flags(monkeypatch)
+    order: list[str] = []  # mutable-ok: records the interleaving of the two tasks
+    clock: list[float] = [0.0]  # mutable-ok: fake monotonic clock advanced per chunk
+
+    async def chunks():
+        for index in range(6):
+            clock[0] += 0.02
+            order.append(f"chunk{index}")
+            yield _simple_chunk(content=str(index))
+
+    async def other_task():
+        order.append("other")
+
+    other = asyncio.ensure_future(other_task())
+    async for _ in async_data_generator(
+        response=chunks(),
+        user_api_key_dict=_user_auth(),
+        request_data={"model": "gpt-4"},
+        now=lambda: clock[0],
+    ):
+        pass
+    await other
+
+    assert "other" in order[:-1], order
+    assert order.index("other") >= 2, order