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A stylized human figure and an abstract AI form working together to adjust a series of intricate, geometric shapes. The scene symbolizes the process of fine-tuning, where human expertise and AI capabilities merge harmoniously.

What is LLM fine-tuning?

By Jacob Andra / Published July 31, 2024 
Last Updated: August 6, 2024

Large language models (LLMs) use natural language processing and generative AI capabilities to understand and generate human-like text with remarkable proficiency. Still, their general-purpose design fails to capture the nuance needed for many domain-specific tasks.

This is where LLM fine-tuning comes into play. It trains a general-purpose LLM to be a specialist.

According to this paper, fine-tuning can dramatically enhance the performance of an LLM on specialized tasks. Increasing the amount of training data, along with other factors such as model size, creates a multiplier effect on performance. This relationship follows a power law, meaning small changes can lead to significant improvements when factors are increased together, rather than individually.

Main takeaways
Fine-tuning trains LLMs for specialized tasks.
Requires less data and compute than training an LLM from scratch.
Fine-tuned models often outperform general LLMs for specific applications.
A customized LLM provides a significant competitive edge.
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What are large language models?

Large language models are a type of artificial intelligence specifically focused on processing and generating human language. They are based on neural networks with many layers, which is why they are often referred to as "deep" learning models.

The "large" aspect refers to the number of parameters (internal variables) that these models have. For instance, some of the most advanced LLMs have billions of parameters, which are adjusted during training to learn language patterns and structures.

What is fine-tuning?

Fine-tuning improves the performance of LLMs for specific tasks or specialized domains. To understand how, let’s use a human analogy. Imagine a newly-minted doctor with a broad knowledge of medicine. This is our general-knowledge LLM.

Now, imagine this doctor decides to specialize in cardiology. They don't forget all their general medical knowledge. Instead, they build upon that foundation, diving deep into heart-related topics, techniques, and treatments. They read specialized journals, attend cardiology conferences, and gain hands-on experience with heart patients.

After extensive specialized study, the doctor is now a cardiologist. Their generalized medical knowledge has been “fine-tuned” to the subspecialty of cardiology.

Fine-tuning trains an LLM on a smaller, task-specific dataset—usually labeled data. The process produces models that outperform general-purpose LLMs in specific tasks. Organizations can adapt pre-trained models to their unique requirements, terminology, and style.

The fine-tuning process

Infographic of fine-tuning process in large language models, by Talbot West

The fine-tuning process involves six main stages:

  1. Data preparation
  2. Model selection
  3. Hyperparameters adjustment
  4. Model training
  5. Evaluation and iteration
  6. Deployment and monitoring

Data preparation

The training process starts with dataset preparation relevant to the specific task. This dataset should be carefully curated and preprocessed to provide high quality and relevance.

For example, a model for medical diagnostics requires a dataset of medical texts, clinical notes, and other related documents. The team then preprocesses the dataset to make it as intelligible as possible to the model.

Model selection

Choose a pre-trained model that serves as the base. Models such as GPT-4 or BERT have already been trained on massive datasets and have acquired a broad understanding of language.

Hyperparameters adjustment

Hyperparameters, such as learning rate, batch size, and epochs, are important parts of the fine-tuning process. These parameters need to be adjusted to balance the trade-off between learning efficiency and model performance. A learning rate that is too high can lead to overfitting, while one that is too low can slow down the learning process.

Model training

The pre-trained language model is further trained on your task-specific dataset. This involves feeding the model batches of data, calculating the loss, and updating the model weights using backpropagation.

The training continues until the model's performance on validation can no longer improve, which indicates that it has learned to generalize well from the specific dataset.

Evaluation and iteration

After training, the model is evaluated using a separate validation dataset to ensure it performs well on unseen data. Metrics such as accuracy, precision, recall, and F1 score are used to measure performance.

Based on these results, the model might undergo several iterations of fine-tuning, where hyperparameters are adjusted and training is repeated to achieve optimal performance.

Deployment and monitoring

Once the model has been fine-tuned and evaluated, it is deployed in a production environment. To maintain fine-tuned model performance over time, developers must monitor it continuously. This involves tracking the model's outputs and making periodic adjustments as new data becomes available or as the task requirements evolve.

A stylized art deco machine with visible cogs, circuits, and neural pathways, surrounded by a dynamic pattern of light and shadow. This image conveys the meticulous process of LLM fine-tuning, highlighting the precision and elegance of the technology.—What is LLM fine tuning?

Benefits of fine-tuning LLMs

There are many reasons why enterprises opt for a fine-tuned LLM for their operational needs:

  • Task-specific performance enhancement. Fine-tuning improves LLMs for specific tasks through adaptation to the nuances and requirements of particular applications.
  • Improved efficiency and accuracy. Training a model on smaller, task-specific data refines its understanding and predictions, which leads to greater efficiency and accuracy. This focused training helps the model grasp the context and nuances of specialized data, which reduces errors and enhances overall performance.
  • Cost-effectiveness. Fine-tuning uses pre-existing, pre-trained models, which reduces the computational resources and time required, compared to training a model from scratch.
  • Enhanced customization. Fine-tuning offers the flexibility to customize LLMs for specific industry needs or organizational requirements. Adapting a model to understand legal jargon, medical terminology, or specific customer service protocols aligns the LLM with the unique vocabulary and context of the application.
  • Scalability and adaptability. Fine-tuned models scale and adapt easily to different tasks within the same domain or across different domains. This adaptability enables the deployment of the same underlying model architecture for diverse applications, which maintains consistency and reduces the need for multiple specialized models.
  • Faster time to market. Pre-trained models with fine-tuning significantly shorten the development cycle, which gives businesses the ability to deploy AI solutions more rapidly.
  • Better user experience. Fine-tuned LLMs deliver more coherent, context-aware, and relevant responses.
  • Domain-specific challenge solutions. Different domains pose unique challenges, such as specialized terminology, regulatory requirements, and specific user needs. Fine-tuning equips LLMs to address these challenges through the incorporation of domain-specific knowledge and expertise into the model, which results in compliance and relevance in specialized fields.
  • Continuous improvement. Fine-tuning is not a one-time process; models undergo continual fine-tuning as new data becomes available or as task requirements evolve. This continuous improvement cycle keeps LLMs up-to-date and maintains high performance over time, as they adapt to changes and new information effectively.

If you want to experience the benefits of fine-tuning LLMs, give us a call! Here at Talbot West, we can lead you to AI implementations that drive real business value.

Applications for fine-tuned LLMs

A minimalist art deco composition showing hands reaching out toward a central glowing sphere. Inside the sphere are abstract icons representing different applications (e.g., language translation, medical diagnosis, financial analysis). The background consists of elegant geometric shapes and bold lines.—Applications of tine-tuned LLMs

A fine-tuned LLM can supercharge your organizational efficiency in any sector, especially in the following industries and use cases.

Healthcare

Fine-tuned LLMs offer major advantages over general language models in healthcare applications. By training on specialized medical datasets, these models develop a nuanced understanding of medical terminology, procedures, and best practices that general LLMs lack.

A recent paper demonstrated “the superiority of…fine-tuned models over their corresponding base models across all medical benchmark datasets.” Med42, a fine-tuned LLM, demonstrated the following capabilities.

  1. USMLE: 72% accuracy, setting a new standard for open medical LLMs
  2. MedQA: 61.5% accuracy, outperforming GPT-3.5 (50.8%)
  3. MMLU clinical topics: consistently outperformed GPT-3.5, with scores ranging from 67.4% to 86.0%
  4. MedMCQA: 60.9% accuracy
  5. Clinical Elo Rating: top score of 1764, surpassing Llama3-70B-Instruct and GPT4-o
  6. MedQA zero-shot: 79.10, setting a new benchmark for open medical LLMs
  7. Multiple Choice Question Answering: outperforms GPT-4.0 in most tasks

We predict a major trend of highly-specialized fine-tuned LLMs for a broad range of niche healthcare use cases. Expect to see a lot more specialized implementations.

Legal

Unlike general large language models, fine-tuned LLMs can accurately interpret complex legal jargon, cite relevant case law and statutes without fabrication, and generate jurisdiction-specific legal documents.

They excel at tasks such as contract analysis, predicting case outcomes based on historical data, and developing legal strategies—capabilities that general LLMs often struggle with. This specialized knowledge allows fine-tuned LLMs to provide more reliable and actionable legal insights, reducing the risk of errors in high-stakes legal work.

Finance

In finance, fine-tuned LLMs interpret complex financial instruments, regulatory requirements, and market dynamics with high accuracy. They analyze historical data to predict trends, assess credit risk precisely, and detect subtle fraud patterns. These models offer tailored investment advice based on individual risk profiles and financial goals.

Fine-tuned LLMs provide accurate financial forecasts and compliance checks, minimizing errors in critical financial decisions. They can navigate intricate financial regulations across different jurisdictions and financial products without hallucinating or misinterpreting crucial legal or compliance details that general LLMs lack.

Education

Fine-tuned LLMs education understand curriculum standards, pedagogical methods, and student learning patterns. They provide personalized feedback based on individual learning histories and adapt explanations to a student's comprehension level.

These models accurately grade complex assignments, considering nuanced rubrics and subject-specific criteria. They generate custom learning materials tailored to individual needs, learning styles, and curriculum requirements.

Unlike general LLMs, fine-tuned models can track a student's progress across multiple subjects and recommend targeted interventions without conflating educational standards from different regions or grade levels.

Human resources

Fine-tuned HR LLMs understand company-specific policies, job requirements, and organizational culture. They screen resumes with precision, matching candidates to job descriptions based on nuanced criteria. These models conduct preliminary interviews, adapting questions based on candidate responses.

While general LLMs might provide broad HR advice, fine-tuned models navigate complex employment laws and company-specific HR practices without misinterpreting crucial legal or policy details.

Gaming

LLMs can be fine-tuned to understand game mechanics, narrative structures, and player behavior patterns. They generate dynamic storylines and character dialogues that adapt to player choices. These models create personalized gaming experiences by adjusting difficulty levels and in-game events.

Regular LLMs might create generic game content, but fine-tuned models maintain consistency in complex game lore and character development without introducing plot holes or contradicting established game rules.

Best practices of LLM fine-tuning

Fine-tuning pre-trained language models requires a strategic approach for optimal results. Here are the best practices for effective LLM fine-tuning:

  • Base language model comprehension. Knowledge of the original model's architecture and capabilities proves valuable. Information about model size, trainable parameters, and training datasets used for initial training provides insights into its strengths and limitations.
  • Fine-tuning technique selection. Different tasks require different fine-tuning techniques. Traditional fine-tuning, supervised fine-tuning, and parameter-efficient fine-tuning represent common approaches.
  • Custom dataset creation. A well-curated custom dataset forms the foundation for fine-tuning. The fine-tuning dataset must represent the domain-specific data the model will encounter. For tasks like entity recognition or machine translation, domain-specific datasets improve model performance.
  • Transfer learning application. Transfer learning leverages pre-existing knowledge from the base language model and adapts it to new tasks. This process involves LLM training on broad language understanding and refinement with domain-specific data. Fine-tuned language models often show improved generalization capabilities across different tasks.
  • Preference fine-tuning approach. This paper suggests that preference fine-tuning of LLMs is most effective when using suboptimal, on-policy data. Approaches that use on-policy sampling or negative gradients have been shown to outperform offline and maximum likelihood objectives by more effectively altering probability mass in categorical distributions.
  • Task-specific fine-tuning focus. For language understanding tasks, a chat dataset or benchmark dataset proves effective. Fine-tuning models for programming languages requires specific datasets with code snippets and relevant annotations.
  • Advanced technique application. Advanced techniques such as low-rank matrix factorization reduce the number of trainable parameters during fine-tuning. These techniques maintain the model's performance while they optimize resource usage.
  • Performance assessment. Regular performance assessment of fine-tuned language models uses relevant evaluation metrics. These metrics gauge the model's language understanding, generalization capabilities, and effectiveness in domain-specific tasks. Iterative testing and evaluation refine the model further.
  • Continuous fine-tuning with new data and improvements. This approach keeps the model relevant and accurate over time. Regular updates with new domain-specific data maintain the model's performance and adapt it to evolving requirements.
  • Generalization capability improvement. Fine-tuning should enhance the model's generalization capabilities. A well-fine-tuned model performs well not only on the fine-tuning dataset but also on unseen data. This requires careful selection of training datasets and a focus on diversity within the data.

Challenges and considerations

Let’s look at some of the challenges that can arise in the fine-tuning process.

A minimalist art deco design showing a stylized human head in profile, divided into sections representing different challenges (e.g., privacy, bias, ethical considerations). Each section is filled with intricate geometric patterns and subtle glowing elements, emphasizing the complexity of these issues.—Challenges and consideration of LLM fine tuning

Data quality and bias

LLMs might learn and perpetuate biases present in the training data, which leads to skewed or unfair outcomes. Bias mitigation requires rigorous auditing and curation of datasets for diversity and fairness, implementation of algorithms to identify biases, and continuous monitoring and updates to address emerging biases.

Overfitting

Overfitting happens when a model becomes too specialized to its training data. It's like memorizing exam answers instead of understanding the subject. The model performs great on familiar data but struggles with new scenarios. To prevent this, use techniques that help the model learn general patterns, not just specific examples.

Model generalization vs. specialization

Fine-tuning requires balancing generalization and specialization. Too much specialization leads to overfitting, where the model excels on training data but fails on new scenarios. Too little specialization results in subpar task performance. Achieving the right balance involves careful data selection, diverse testing, and continuous refinement based on performance metrics and feedback.

Security and privacy

Fine-tuning LLMs on proprietary or sensitive data poses risks related to data privacy and security. Implementation of robust security measures, including tools to protect the LLM and applications from potential threats and attacks, becomes essential.

Resource efficiency

Fine-tuning demands intensive computation and can increase costs. New techniques such as Parameter-Efficient Fine-Tuning (PEFT) and prompt engineering can mitigate resource demands while maintaining performance improvements.

Fine-tuning vs prompt engineering

Fine-tuning and prompt engineering are two different approaches to the optimization of an LLM for specific tasks.

  • Fine-tuning changes the model's internal workings through extra training on task-specific data to create a specialized version of the model.
  • Prompt engineering crafts clever instructions to guide the model without changing its core.
  • Fine-tuning often works better for complex tasks but needs more computer power and data.
  • Prompt engineering is quicker and uses fewer resources.

The tl;dr: fine-tuning gives better results and is more costly and cumbersome to spin up. Prompt engineering provides quick, flexible solutions that are not as tailored to your use case.

LLM fine-tuning vs RAG

LLM fine-tuning and retrieval-augmented generation (RAG) offer distinct approaches to driving specialization in AI. These two methodologies can be combined for the ultimate specialized AI system.

  • Fine-tuning retrains a model on specific data, creating a specialized version.
  • RAG combines the model's knowledge with real-time information retrieval.
  • Fine-tuning results in deeper specialization but requires retraining for new information.
  • RAG provides flexibility and gives the LLM a specific knowledge base to query for targeted results.

See our article on RAG vs fine-tuning for an in-depth look at the differences between these approaches.

Reach out to Talbot West

Talbot West is here to help you assess the best AI solution for your needs. We’ll guide you through tool selection, implementation, governance, and any other issue you’re facing with AI.

Schedule a free consultation, and check out our services page for the full scope of our offerings.

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LLM fine-tuning FAQ

Fine-tuning LLMs can be costly. Expenses vary based on model size, dataset complexity, and fine-tuning duration. While less expensive than training from scratch, it still demands significant resources. Cost-effective options, like parameter-efficient fine-tuning, exist for organizations with budget constraints.

The number of samples for LLM fine-tuning depends on the task complexity and desired performance. Generally, a few hundred to several thousand high-quality, diverse samples suffice. More samples often yield better results, but the benefits diminish beyond a certain point.

Fine-tuning is a form of transfer learning. It adapts a pre-trained model to specific tasks, while transfer learning broadly refers to using knowledge from one domain in another. Fine-tuning offers more targeted improvements for specific applications, but both techniques have their place in AI development.

LLM fine-tuning duration varies widely based on model size, dataset size, and available computational resources. It can range from a few hours for small models to several days or weeks for large models. Efficient techniques and hardware acceleration can significantly reduce fine-tuning time.

Domain fine-tuning adapts an LLM to a specific field or industry. It involves training the model on domain-specific data to improve its performance in tasks related to that area. This process results in a model with specialized knowledge and improved capabilities within the targeted domain.

Resources

  • Tajwar, F. (2024, April 22). [2404.14367] Preference Fine-Tuning of LLMs Should Leverage Suboptimal, On-Policy Data. arXiv. https://arxiv.org/abs/2404.14367
  • Med42 - Evaluating Fine-Tuning Strategies for Medical LLMs: Full-Parameter vs. Parameter-Efficient
  • Approaches. (2024, April 24). arXiv. https://arxiv.org/html/2404.14779v1
    Hedge, S. R. (n.d.). Efficient Finetuning of LLMs. UCSD CSE. https://cseweb.ucsd.edu/classes/wi24/cse234-a/slides/CSE234-GuestLecture-SumanthHegde.pdf
  • Jeong, C. (n.d.). Fine-tuning and Utilization Methods of Domain-specific LLMs. arXiv. https://arxiv.org/pdf/2401.02981
  • Liu, A. (2023, September). Intro to LLM Fine Tuning. LLM Fine-tuning Intro. https://public.websites.umich.edu/~amberljc/file/llm-fine-tuning.pdf
  • Rav, M. J., VM, K., Warrier, H., & Gupta, Y. (2024, March 23). 2404.10779v1 [cs.SE] 23 Mar 2024. arXiv. https://arxiv.org/pdf/2404.10779
  • Zhang, B., Liu, Z., & Cherry, C. (2024, February 27). [2402.17193] When Scaling Meets LLM Finetuning: The Effect of Data, Model and Finetuning Method. https://arxiv.org/abs/2402.17193
  • Wang, Y., Si, S., Li, D., & Lukasik, M. (n.d.). Two-stage LLM Fine-tuning with Less Specialization and More Generalization. OpenReview. https://openreview.net/pdf?id=2aXFFOp4nX
  • Mehta, Y., & Seetharaman, K. (n.d.). Mathematical Reasoning Through LLM Finetuning. Stanford University. https://web.stanford.edu/class/archive/cs/cs224n/cs224n.1244/final-projects/KarthikVinaySeetharamanYashMehta.pdf

About the author

Jacob Andra is the founder of Talbot West and a co-founder of The Institute for Cognitive Hive AI, a not-for-profit organization dedicated to promoting Cognitive Hive AI (CHAI) as a superior architecture to monolithic AI models. Jacob serves on the board of 47G, a Utah-based public-private aerospace and defense consortium. He spends his time pushing the limits of what AI can accomplish, especially in high-stakes use cases. Jacob also writes and publishes extensively on the intersection of AI, enterprise, economics, and policy, covering topics such as explainability, responsible AI, gray zone warfare, and more.
Jacob Andra

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