Inclusion Criteria:

* Eastern Cooperative Oncology Group (ECOG) performance status of =\< 2
* IDH1-R132 mutated disease status as assessed by local laboratory. 2HG-producing IDH1 variants outside of R132 (i.e. R100) may be eligible after discussion with the principal investigator (PI)
* Treatment naive or relapsed/refractory AML who are eligible for intensive chemotherapy. Patients with high-risk MDS or MPN (defined as \>= 10% bone marrow blasts, or intermediate or high risk by International Prognostic Scoring System \[IPSS\], revised \[R\]-IPSS or dynamic \[D\]-IPSS) may also be eligible after discussion with the PI
* Direct bilirubin =\< 2 x upper limit of normal (ULN) unless deemed to be related to underlying leukemia
* Alanine aminotransferase (ALT) and/or aspartate aminotransferase (AST) =\< 3 x ULN unless deemed to be related to underlying leukemia
* Creatinine clearance \>= 30 ml/min based on the Cockcroft-Gault equation
* Willing and able to provide informed consent
* In the absence of rapidly proliferative disease, the interval from prior treatment to time of initiation will be at least 7 days for cytotoxic or non-cytotoxic (immunotherapy) agents
* Male subjects must agree to refrain from unprotected sex and sperm donation from initial study drug administration until 90 days after the last dose of study drug

Exclusion Criteria:

* Patients who have previously received either ivosidenib or CPX-351
* Patients with any concurrent uncontrolled clinically significant medical condition including infection, laboratory abnormality, or psychiatric illness, which could place the patient at unacceptable risk of study treatment
* The use of other chemotherapeutic agents or anti-leukemic agents is not permitted during study with the following exceptions (1) intrathecal chemotherapy for prophylactic use or for controlled central nervous system (CNS) leukemia. (2) use of hydroxyurea, and/or cytarabine (1 or 2 doses; up to 2 g/m\^2) for patients with rapidly proliferative disease is allowed before the start of study therapy
* Patients with active graft-versus-host-disease (GVHD) status post stem cell transplant (patients without active GVHD on chronic suppressive immunosuppression and/or phototherapy for chronic skin GVHD are permitted after discussion with the PI)
* Patients with any severe gastrointestinal or metabolic condition which could interfere with the absorption of oral study medications
* Patients with symptomatic congestive heart failure (New York Heart Association \[NYHA\] class III or IV), unstable angina, or an ejection fraction \< 45%
* Patients with prior anthracycline exposure of \> 360 mg/m\^2 daunorubicin (or equivalent) or \> 210 mg/m\^2 daunorubicin (or equivalent) in patients with prior mediastinal radiation
* Corrected QT (QTc) interval using Fridericia's formula (QTcF) \>= 470 msec. A prolonged QTc interval in the setting of right bundle branch block is permitted after discussion with the PI
* Nursing women, women of childbearing potential (WOCBP) with positive urine or serum pregnancy test, or women of childbearing potential who are not willing to maintain adequate contraception

* Appropriate highly effective method(s) of contraception include oral or injectable hormonal birth control, intrauterine device (IUD), and double barrier methods (for example a condom in combination with a spermicide)
* Subjects with a known medical history of progressive multifocal leukoencephalopathy (PML)
* Subjects taking strong CYP3A4 inducers are excluded from the study unless they can be transferred to other medications within \>= 5 half lives prior to dosing
* Patients with a diagnosis of acute promyelocytic leukemia (APL)
* Unresolved toxicities \> grade 1 from prior treatment including chemotherapy, targeted therapy, immunotherapy, experimental agents, radiation, or surgery