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class="arrow"><i class="icon-left-open-big" aria-hidden="true"></i></span><div class="photo"><img width="150" height="150" src="https://wand.ai/wp-content/uploads/Wand-AI-GITEX-3@3x-150x150.png" class="attachment-be_thumbnail size-be_thumbnail wp-post-image" alt="Wand-AI-Rotem Alaluf-Yogev Shifman - Jean-Paul Sacy" decoding="async" srcset="https://wand.ai/wp-content/uploads/Wand-AI-GITEX-3@3x-150x150.png 150w, https://wand.ai/wp-content/uploads/Wand-AI-GITEX-3@3x-500x500.png 500w, https://wand.ai/wp-content/uploads/Wand-AI-GITEX-3@3x-1200x1200.png 1200w, https://wand.ai/wp-content/uploads/Wand-AI-GITEX-3@3x-300x300.png 300w, https://wand.ai/wp-content/uploads/Wand-AI-GITEX-3@3x-768x768.png 768w, https://wand.ai/wp-content/uploads/Wand-AI-GITEX-3@3x-1536x1536.png 1536w, https://wand.ai/wp-content/uploads/Wand-AI-GITEX-3@3x-2048x2048.png 2048w, https://wand.ai/wp-content/uploads/Wand-AI-GITEX-3@3x-600x600.png 600w, https://wand.ai/wp-content/uploads/Wand-AI-GITEX-3@3x-75x75.png 75w, https://wand.ai/wp-content/uploads/Wand-AI-GITEX-3@3x-720x720.png 720w, https://wand.ai/wp-content/uploads/Wand-AI-GITEX-3@3x-480x480.png 480w, https://wand.ai/wp-content/uploads/Wand-AI-GITEX-3@3x-24x24.png 24w, https://wand.ai/wp-content/uploads/Wand-AI-GITEX-3@3x-48x48.png 48w, https://wand.ai/wp-content/uploads/Wand-AI-GITEX-3@3x-96x96.png 96w" sizes="(max-width:767px) 150px, 150px" /></div><div class="desc"><h6>Reimagine Productivity with Collaborative AI: One Enterprise at a Time</h6><span class="date"><i class="icon-clock" aria-hidden="true"></i>October 10, 2024</span></div></a><a class="fixed-nav fixed-nav-next format- style-default" href="https://wand.ai/blog/controlling-the-data-deluge-how-wand-ai-transforms-investment-banking/"><span class="arrow"><i class="icon-right-open-big" aria-hidden="true"></i></span><div class="photo"><img width="150" height="150" src="https://wand.ai/wp-content/uploads/image2-1-150x150.png" class="attachment-be_thumbnail size-be_thumbnail wp-post-image" alt="" decoding="async" srcset="https://wand.ai/wp-content/uploads/image2-1-150x150.png 150w, https://wand.ai/wp-content/uploads/image2-1-600x600.png 600w, https://wand.ai/wp-content/uploads/image2-1-24x24.png 24w, https://wand.ai/wp-content/uploads/image2-1-48x48.png 48w, https://wand.ai/wp-content/uploads/image2-1-96x96.png 96w, https://wand.ai/wp-content/uploads/image2-1-300x300.png 300w" sizes="(max-width:767px) 150px, 150px" /></div><div class="desc"><h6>Controlling the Data Deluge: How Wand AI Transforms Investment Banking</h6><span class="date"><i class="icon-clock" aria-hidden="true"></i>November 8, 2024</span></div></a><div class="mfn-builder-content mfn-single-post-tmpl-builder"><section class="section mcb-section mfn-default-section mcb-section-y5tepn3mn default-width" style="" ><div class="mcb-background-overlay"></div><div class="section_wrapper mfn-wrapper-for-wraps mcb-section-inner mcb-section-inner-y5tepn3mn"><div class="wrap mcb-wrap mcb-wrap-0r5txce4l one tablet-one laptop-one mobile-one clearfix" data-desktop-col="one" data-laptop-col="laptop-one" data-tablet-col="tablet-one" data-mobile-col="mobile-one" style="" ><div class="mcb-wrap-inner mcb-wrap-inner-0r5txce4l mfn-module-wrapper mfn-wrapper-for-wraps" ><div class="mcb-wrap-background-overlay"></div><div class="column mcb-column mcb-item-x7yy1x4nk one laptop-one tablet-one mobile-one column_breadcrumbs" style="" ><div class="mcb-column-inner mfn-module-wrapper mcb-column-inner-x7yy1x4nk mcb-item-breadcrumbs-inner"><ul class="breadcrumbs no-link"><li><a href="https://wand.ai/blog/category/ai-technology/">AI Technology</a><span class="mfn-breadcrumbs-separator"> ></span></li><li><a href="https://wand.ai/blog/compounding-error-effect-in-large-language-models-a-growing-challenge/">Compounding Error Effect in Large Language Models: A Growing Challenge</a></li></ul></div></div></div></div></div></section><section class="section mcb-section mfn-default-section mcb-section-xrw9oleqv single-post-block default-width" style="" ><div class="mcb-background-overlay"></div><div class="section_wrapper mfn-wrapper-for-wraps mcb-section-inner mcb-section-inner-xrw9oleqv"><div class="wrap mcb-wrap mcb-wrap-lqqzzr9of four-fifth tablet-one laptop-four-fifth mobile-one clearfix" data-desktop-col="four-fifth" data-laptop-col="laptop-four-fifth" data-tablet-col="tablet-one" data-mobile-col="mobile-one" style="" ><div class="mcb-wrap-inner mcb-wrap-inner-lqqzzr9of mfn-module-wrapper mfn-wrapper-for-wraps" ><div class="mcb-wrap-background-overlay"></div><div class="column mcb-column mcb-item-rruegy9nj one laptop-one tablet-one mobile-one column_tag_cloud" style="" ><div class="mcb-column-inner mfn-module-wrapper mcb-column-inner-rruegy9nj mcb-item-tag_cloud-inner"><ul class="mfn-tag-cloud mfn-tag-cloud-text"><li><a href="https://wand.ai/blog/category/ai-technology/">AI Technology</a></li></ul></div></div><div class="column mcb-column mcb-item-z36hbusfn one laptop-one tablet-one mobile-one column_heading" style="" ><div class="mcb-column-inner mfn-module-wrapper mcb-column-inner-z36hbusfn mcb-item-heading-inner"><h1 class="title">Compounding Error Effect in Large Language Models: A Growing Challenge</h1></div></div><div class="column mcb-column mcb-item-hs15eo8sf one laptop-one tablet-one mobile-one column_heading" style="" ><div class="mcb-column-inner mfn-module-wrapper mcb-column-inner-hs15eo8sf mcb-item-heading-inner"><p class="title">October 24, 2024</p></div></div><div class="column mcb-column mcb-item-b22dkcl6 one laptop-one tablet-one mobile-one column_post_content" style="" ><div class="mcb-column-inner mfn-module-wrapper mcb-column-inner-b22dkcl6 mcb-item-post_content-inner"><div class="mfn-builder-content mfn-default-content-buider"></div><section class="section mcb-section the_content has_content"><div class="section_wrapper"><div class="the_content_wrapper "> <p><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc_IcdsaKH21ToTXkRRGPw6-ACTQzDF0fD5x_35paWDSOVfStqBd13nKsQ5D8uDqBHmBDRZYSz-CGLT1FHGvIZ8BYecOOoHXb_WGJM5eijfVZtDpSKbksPC4sG4bDNSsHrOMk1diHz75fbolVA9pTOSCYwQ?key=_unKrLdraUu_eOYtpbtyQg" width="682.2666666666668" height="381"></p> <h3 class="wp-block-heading"><strong>Small Errors, Big Problems: The Hidden Risk in AI Systems</strong></h3> <p><em>What if a tiny error in an AI system could ripple through your enterprise, turning minor inaccuracies into major operational challenges?</em></p> <p>In today’s AI-driven world, Large Language Models (LLMs) and AI systems are becoming central access points to vast bodies of human knowledge. Understanding their limitations isn’t just important—it’s imperative. </p> <p>In our previous discussions, we explored how LLMs can generate plausible but incorrect information through <a href="https://wand.ai/blog/why-do-llms-hallucinate/">hallucinations</a>, and their struggles with basic <a href="https://wand.ai/blog/large-language-models-are-so-unreasonable/">reasoning tasks</a> (like determining if 0.9 is larger than 0.11). Today, we’ll delve into another critical challenge: the <strong>Compounding Error Effect</strong>.</p> <h3 class="wp-block-heading"><strong>The Strategic Imperative</strong></h3> <p>LLMs are swiftly integrating into enterprise operations—handling customer service requests, analyzing vast datasets, and supporting critical business operations and decision-making. With enterprises investing billions in AI deployment, addressing LLM limitations isn’t optional; it’s a strategic imperative. </p> <p>As errors compound through sequential processing steps, they can cascade into significant accuracy problems that impact business-critical systems and processes.</p> <h3 class="wp-block-heading"><strong>The Snowball Effect: How a 1% Error Becomes a Critical Problem</strong></h3> <p>Consider this scenario: an LLM makes a small 1% error in a patient’s diagnosis. Multiply that across hundreds of processing steps, and what began as a tiny mistake could build an inaccurate diagnostic foundation. While this is an extreme example, it highlights how minor errors can snowball into significant consequences.</p> <p>This article will equip you with practical knowledge about compounding errors: how to identify them, measure their impact, and implement proven strategies to minimize their effects. Whether you’re a technical leader or a business stakeholder, you’ll learn valuable information addressing this vital issue. </p> <p>For this conversation, we’re delighted to be joined once again by <strong>Dr. Mehdi Fatemi</strong>, Senior Researcher and Team Lead at Wand Research, Wand AI’s fundamental research group. In this third installment of our series exploring critical issues related to LLMs, Dr. Fatemi joins Sophia from our marketing team to examine the challenges of compounding errors and their implications for enterprise AI deployment.</p> <h3 class="wp-block-heading"><strong>Inside the Solution: A Discussion with Wand AI’s Dr. Fatemi</strong></h3> <p><strong>Sophia</strong>: Dr. Fatemi, thank you for joining us again. Could you explain what compounding errors are in the context of LLMs?</p> <p><strong>Dr. Fatemi</strong>: Certainly. Compounding errors occur when small inaccuracies in an LLM’s predictions propagate and accumulate through subsequent processing steps. This is primarily due to the sequential nature of how LLMs operate. They process input sequences one step at a time, using previous outputs as inputs for the next step.</p> <p>To understand this better, consider that LLMs generate text at the token level through an auto-regressive process: given the prior tokens, the model predicts the next token in the sequence. What’s concerning is how quickly these errors can multiply. For example, even a tiny 1% error rate per token can escalate exponentially into an 87% chance of error by the 200th token.</p> <h3 class="wp-block-heading"><strong>Root Causes of Compounding Errors</strong></h3> <p><strong>Sophia</strong>: What are the main factors contributing to these compounding errors?</p> <p><strong>Dr. Fatemi</strong>: One of the primary issues is the lack of global coherence in LLMs. These models typically focus on local coherence—generating text that makes sense within a small window—but they often struggle to maintain global coherence, or consistency across the entire text and external references like news or facts.</p> <p>This means there’s always a chance of error, and as the auto-regressive process continues, a single factual error early in an answer can compound into a completely fabricated response. This lack of global coherence can lead to significant errors, especially in domains where factual accuracy is crucial.</p> <p>Think about a complex problem where the LLM needs to break down the problem into smaller steps and then synthesize these steps into a precise answer. Each step naturally depends on the prior ones, and for the final answer to be correct, all steps must be accurate and coherent. If there’s a fixed probability of making an error at each step, this leads to a significant chance that the ultimate answer will be incorrect. This cascading effect is responsible for complex problems being exponentially more error-prone than simpler ones.</p> <p>Additionally, when LLMs are used for complex problem-solving, errors can compound at both the token level and the step level. Each step in a chain of reasoning carries a probability of being wrong, which can ultimately invalidate the entire answer. This is particularly problematic in domains requiring high accuracy and precise reasoning.</p> <h3 class="wp-block-heading"><strong>Real-World Consequences</strong></h3> <p><strong>Sophia</strong>: How do these compounding errors affect businesses in practice?</p> <p><strong>Dr. Fatemi</strong>: They can have significant and multifaceted consequences for businesses. For example, as text generation progresses, the likelihood of factual errors grows exponentially. If an LLM incorrectly states that the first moon landing occurred in 1996 instead of 1969, subsequent content may build upon this error. This creates a cascade of inaccurate information about crew members, mission details, and historical context. In sufficiently long texts, the probability of at least one erroneous statement approaches certainty.</p> <p>Another issue is the derailing of contextual relevance. Let’s say an LLM erroneously changes a conference location from a small town in southern UK to London. This initial error can lead to increasingly irrelevant content about visiting British landmarks and discussing history, completely veering off from the original discussion about the conference. This loss of context is particularly problematic in applications such as language translation, where inaccurate translations can alter the meaning of critical information, or in dialogue systems, where conversational AI might provide misleading, derailing or irrelevant responses.</p> <p>Finally, compounding errors can severely hinder logical reasoning, which is also a serious consequence. Consider solving a mathematical problem that typically involves multiple steps. Figuring out these steps forms a line of reasoning, often referred to as a chain of thought. Even if the presumed steps are correct, a small initial error can compound into a completely incorrect answer. For example, if a number is mistaken in the first step, all subsequent calculations and reasoning will be based on that incorrect number. Such an error may even change the direction of the chain of thought so much that the initial mistake compounds into a completely different line of reasoning. </p> <p>This is one of the primary reasons why LLMs struggle with reasoning tasks and have limited capabilities in solving unseen problems.</p> <h3 class="wp-block-heading"><strong>Research Insights and Future Directions</strong></h3> <p><strong>Sophia</strong>: What does current research tell us about addressing these challenges?</p> <p><strong>Dr. Fatemi</strong>: Recent research has revealed that the cumulative effect of error propagation poses a significant challenge for transformers in handling complex compositional tasks with unprecedented patterns. Even minor initial errors can cascade into substantial inaccuracies downstream, preventing the model from achieving correct outcomes. <a href="http://arxiv.org/abs/2305.18654">Researchers</a> have found that LLMs exhibit inherent limitations in solving high-complexity compositional tasks due to error propagation and compounding errors.</p> <p>Empirical and theoretical analyses show that errors in early computational stages exponentially accumulate, preventing models from finding correct solutions. Indeed, LLMs rely on shallow pattern-matching rather than systematic problem-solving, which leads to drastic performance declines on out-of-domain or complex instances. This suggests that maximum likelihood training may not suffice for developing robust compositional reasoning capabilities, highlighting the need for alternative approaches to mitigate error propagation and enhance LLMs’ ability to tackle complex tasks.</p> <p>Researchers are also increasingly moving away from token completion as a basis for reasoning, exploring more cognitive-like processes that build upon LLMs’ basic capabilities. This represents a promising direction for addressing the compounding error challenge.</p> <h3 class="wp-block-heading"><strong>Moving Forward: Building More Reliable AI Platforms</strong></h3> <p>As Dr. Fatemi’s detailed explanations indicate, the compounding error effect represents a challenge in the deployment of LLMs, particularly for enterprises who depend on high accuracy and reliability. Addressing these limitations is vital for businesses looking to integrate AI solutions that enhance, rather than compromise, decision-making and operational efficiency.</p> <p>At Wand AI, we’re actively working on developing new technologies to mitigate these challenges, focusing on creating more robust and reliable AI systems that can maintain accuracy over extended processing chains. Our goal is to build more resilient AI systems that maintain accuracy across complex, multi-step tasks, ensuring that even in extended processing chains, reliability remains intact. </p> <p>Wand Research is at the forefront of pioneering secure, personalized collaborative artificial general intelligence (AGI) technologies. 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