Why Small Language Models (SLM) promises to redefine Agesic AI: Efficiency, Cost, and Actual Deployment

Transformation requirements of proxy AI systems
LLM is widely admired for its human abilities and dialogue skills. However, with the rapid growth of proxy AI systems, LLM is increasingly used for repetitive, professional tasks. This shift is developing momentum – half of IT companies now use AI agents and have a lot of capital and projected market growth. These agents typically rely on LLM for decision-making, planning, and task execution through a centralized cloud API. The substantial investment in LLM infrastructure reflects confidence that the model will underpin the future of AI.
SLM: Efficiency, Applicability and Opposition to LLM Over-Dependence
Researchers from NVIDIA and GEORGIA TECH believe that small language models (SLMs) are not only sufficient for many proxy tasks, but are more efficient and cost-effective than large models. They believe that SLM is more suitable for the repetitive and simplistic nature of most proxy operations. Although large models remain critical to more general conversational requirements, they recommend using various models based on task complexity. They challenge the current dependence on LLM in proxy systems and provide a framework for the transition from LLM to SLM. They invited public discussions to encourage more resource-conscious AI deployments.
Why SLM is enough for proxy operations
Researchers believe that SLM is not only able to handle most tasks in AI agents, but is also more practical and cost-effective than LLM. They define SLM as a model that can run effectively on consumer devices, highlighting their advantages – lower latency, reduced energy consumption and easier customization. Since many proxy tasks are repetitive and focused, SLM is usually sufficient or even preferable. This article recommends a shift to a modular proxy system using SLM and LLMS only when necessary, thereby facilitating a more sustainable, flexible and inclusive approach to building intelligent systems.
The debate on LLM dominance
It is believed that LLM always outperforms the small model (SLM) in general language tasks due to its superior scaling and semantic capabilities. Others believe that centralized LLM inferences are more cost-effective due to economies of scale. It is also believed that LLM has attracted much of the industry’s attention just because they started earlier. However, the study counters that SLM is highly adaptable, cheap to run, and can effectively handle well-defined subtasks. Nevertheless, widespread adoption of SLM still faces obstacles, including existing infrastructure investments, assessment bias against LLM benchmarks, and reduced public awareness.
Framework for transitioning from LLM to SLMS
To smoothly go from LLM to smaller professionals (SLM) in proxy-based systems, the process begins with secure collection of usage data while ensuring privacy. Next, clean up the data and filter to remove sensitive details. Using clustering, group common tasks to determine where SLMs can take over. Depending on task requirements, selecting the right SLM and fine-tuning it through a tailored dataset is often used with effective techniques such as Lora. In some cases, LLM output guides SLM training. This is not a one-time process, and models should be updated regularly and refined to align with evolving user interactions and tasks.
Conclusion: Towards sustainable and resource-effective proxy AI
In summary, the researchers believe that moving from large SLMs can significantly improve the efficiency and sustainability of proxy AI systems, especially for repetitive and narrow-sense tasks. They believe that SLM is generally powerful enough, more cost-effective, and more suitable for such roles than general purpose LLM. Model mixing is recommended in situations where wider conversational capabilities are required. To encourage progress and open dialogue, they invite feedback and contribute to their position and are committed to sharing responses openly. The purpose is to stimulate the future more thoughtful and efficient use of AI technology.
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Sana Hassan, a consulting intern at Marktechpost and a dual-degree student at IIT Madras, is passionate about applying technology and AI to address real-world challenges. He is very interested in solving practical problems, and he brings a new perspective to the intersection of AI and real-life solutions.
