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Two popular approaches for customizing large language models (LLMs) for downstream tasks are fine-tuning and in-context learning (ICL). In a recent study, researchers at Google DeepMind and Stanford University explored the generalization capabilities of these two methods. They find that ICL has greater generalization ability (though it comes at a higher computation cost during inference). They also propose a novel approach to get the best of both worlds. 

The findings can help developers make crucial decisions when building LLM applications for their bespoke enterprise data.

Testing how language models learn new tricks

Fine-tuning involves taking a pre-trained LLM and further training it on a smaller, specialized dataset. This adjusts the model’s internal parameters to teach it new knowledge or skills. In-context learning (ICL), on the other hand, doesn’t change the model’s underlying parameters. Instead, it guides the LLM by providing examples of the desired task directly within the input prompt. The model then uses these examples to figure out how to handle a new, similar query.

The researchers set out to rigorously compare how well models generalize to new tasks using these two methods. They constructed “controlled synthetic datasets of factual knowledge” with complex, self-consiste...