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Penelope introduces a novel architectural approach to efficient structured reasoning by localizing recurrent computation within specific decoder intervals of pretrained Transformers. This method transfers visible chain-of-thought processes into latent space, significantly reducing inference latency and computational costs without sacrificing accuracy on benchmark tasks. The work addresses critical scalability challenges in AI models by decoupling complex reasoning capabilities from the need for massive parameter counts or verbose output generation.
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Penelope: Localized Latent Recurrence for Efficient Structured Reasoning

arXiv3 min read

arXiv:2607.25915v1 Announce Type: new Abstract: Complex structured reasoning tasks often require additional computation, yet current language models obtain it mainly by increasing parameter scale or by serializing intermediate steps as chain-of-thought (CoT) tokens. The former raises training and deployment costs, while the latter ties reasoning computation to autoregressive output length. We introduce Penelope, an efficient latent-reasoning framework for pretrained decoder-only Transformers that localizes recurrent computation to a selected decoder interval. The lower decoder prefix is evaluated once to construct a problem-conditioned boundary memory, which is then iteratively refined through time-modulated GRU dynamics and recurrent readout states before answer generation. A progressive CoT-to-latent curriculum transfers visible reasoning into this internal recurrent path, allowing additional computation to be allocated in latent space without repeatedly executing the complete decoder or generating a long intermediate trace. Experiments on open-source structured-reasoning benchmarks show that, at validation-selected latent budgets, Penelope attains competitive accuracy relative to established latent-reasoning models while reducing measured inference latency. These results show that latent refinement can be localized to a narrow decoder interval, reducing repeated full-decoder execution without generating a long visible reasoning trace and providing a practical accuracy-efficiency tradeoff for decoder-only Transformer models.

Abstract:Complex structured reasoning tasks often require additional computation, yet current language models obtain it mainly by increasing parameter scale or by serializing intermediate steps as chain-of-thought (CoT) tokens. The former raises training and deployment costs, while the latter ties reasoning computation to autoregressive output length. We introduce Penelope, an efficient latent-reasoning framework for pretrained decoder-only Transformers that localizes recurrent computation to a selected decoder interval. The lower decoder prefix is evaluated once to construct a problem-conditioned boundary memory, which is then iteratively refined through time-modulated GRU dynamics and recurrent readout states before answer generation. A progressive CoT-to-latent curriculum transfers visible reasoning into this internal recurrent path, allowing additional computation to be allocated in latent space without repeatedly executing the complete decoder or generating a long intermediate trace. Experiments on open-source structured-reasoning benchmarks show that, at validation-selected latent budgets, Penelope attains competitive accuracy relative to established latent-reasoning models while reducing measured inference latency. These results show that latent refinement can be localized to a narrow decoder interval, reducing repeated full-decoder execution without generating a long visible reasoning trace and providing a practical accuracy-efficiency tradeoff for decoder-only Transformer models.

Artificial Intelligence (cs.AI)

arXiv:2607.25915 [cs.AI]

(or arXiv:2607.25915v1 [cs.AI] for this version)

https://doi.org/10.48550/arXiv.2607.25915 Focus to learn more arXiv-issued DOI via DataCite (pending registration)

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Full text under the publisher's open licence · 281 words

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