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This research addresses the critical tension between data privacy and model utility in Large Language Models by introducing an intent-driven framework that dynamically sanitizes context. By shifting from static rules to a mechanism-aware approach, the study significantly reduces information leakage while maintaining higher response quality than existing baselines. The findings offer a practical pathway for deploying LLMs in sensitive environments without sacrificing performance.
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Demystifying the Privacy-Utility Trade-off in LLM Interactions

arXiv2 min read

arXiv:2609.10992v1 Announce Type: new Abstract: The integration of Large Language Models into daily tasks relies on context-rich instructions, inevitably exposing sensitive user information. Current privacy-preserving methods typically employ context-agnostic static rules, causing severe utility degradation. However, the specific mechanisms governing how sanitization impacts downstream performance remain largely underexplored. To address this, we conduct a systematic analysis to deconstruct the privacy-utility trade-off, uncovering three underlying mechanisms: (1) Context-Dependent Utility, which first establishes when to sanitize by revealing that data value shifts from critical constraints to dispensable noise based on user intent; (2) Strategic Adaptation, which subsequently determines how to sanitize by dictating that the choice between removal and replacement depends on the task's reliance on factual integrity versus structural coherence; and (3) Combinatorial Interplay, which finally extends the protection scope by demonstrating that attributes form a semantic web of synergistic dependencies or antagonistic redundancies. Guided by these insights, we introduce an intent-driven local protection framework. By distilling a lightweight model Veilmind-4B to drive a dynamic extraction-sanitization-restoration pipeline, our approach reaches a low-leakage privacy point while preserving substantially higher response utility than existing privacy-oriented baselines, advancing the privacy-utility trade-off toward the Pareto frontier.

Abstract:The integration of Large Language Models into daily tasks relies on context-rich instructions, inevitably exposing sensitive user information. Current privacy-preserving methods typically employ context-agnostic static rules, causing severe utility degradation. However, the specific mechanisms governing how sanitization impacts downstream performance remain largely underexplored. To address this, we conduct a systematic analysis to deconstruct the privacy-utility trade-off, uncovering three underlying mechanisms: (1) Context-Dependent Utility, which first establishes when to sanitize by revealing that data value shifts from critical constraints to dispensable noise based on user intent; (2) Strategic Adaptation, which subsequently determines how to sanitize by dictating that the choice between removal and replacement depends on the task's reliance on factual integrity versus structural coherence; and (3) Combinatorial Interplay, which finally extends the protection scope by demonstrating that attributes form a semantic web of synergistic dependencies or antagonistic redundancies. Guided by these insights, we introduce an intent-driven local protection framework. By distilling a lightweight model Veilmind-4B to drive a dynamic extraction-sanitization-restoration pipeline, our approach reaches a low-leakage privacy point while preserving substantially higher response utility than existing privacy-oriented baselines, advancing the privacy-utility trade-off toward the Pareto frontier.

Artificial Intelligence (cs.AI); Cryptography and Security (cs.CR)

arXiv:2609.10992 [cs.AI]

(or arXiv:2609.10992v1 [cs.AI] for this version)

https://doi.org/10.48550/arXiv.2609.10992 Focus to learn more arXiv-issued DOI via DataCite (pending registration)

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Full text under the publisher's open licence · 284 words

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