Diffusion-GR2: Diffusion Generative Reasoning Re-ranker

Generative reasoning re-rankers achieve strong recommendation accuracy by emitting a chain-of-thought before re-ordering a candidate list, but they are slow at inference: an autoregressive (AR) decoder spends one sequential forward pass per reasoning token, and the reasoning trace far exceeds the ranking it produces. To reduce this cost, block-diffusion language models decode many positions in parallel over a few denoising steps and are substantially faster, yet naively converting an AR re-ranker into one opens two accuracy gaps: (1) a structural gap: answer positions are denoised in parallel and scored independently, so the decoder emits invalid rankings (duplicated, dropped, or out-of-set identifiers) that AR avoids through left-to-right masking; and (2) a distributional gap: fine-tuning the converted model on fixed teacher trajectories is off-policy relative to its own decoding at inference, leaving a residual accuracy gap. To close both gaps while keeping the speedup, we propose \textbf{Diffusion-GR2}, a recipe that converts our AR reasoning re-ranker (GR2) into a block-diffusion re-ranker. First, conversion fine-tuning (CFT) adapts the AR-initialized diffusion model to denoise the answer into a valid permutation on its own, without an external constrained decoder. Next, on-policy distillation (OPD) then supervises the model on its own decoded trajectories with dense per-token targets from the AR teacher. Finally, we apply a reinforcement-learning (RL) stage against a re-ranking reward on top of OPD's on-policy policy. Experiments on Amazon Beauty demonstrate that Diffusion-GR2 recovers to near-parity with the AR re-ranker, while block-parallel decoding raises decode throughput by $2.4$--$3.5\times$ at the model's reasoning output length. Ablations show that CFT recovers most of the conversion gap, and that on-policy distillation further closes it to the AR reference.

GR2 Technical Report

Industrial recommendation systems serve billions of users through a multi-stage funnel -- retrieval, early-stage ranking, and re-ranking -- where the final re-ranking step disproportionately shapes user engagement and downstream performance, particularly for carousel and grid display formats. Despite growing enthusiasm for Large Language Models (LLMs) in recommendation, three gaps hinder industrial adoption: (1) most efforts target retrieval and ranking, leaving re-ranking -- the stage closest to the final user experience -- largely underexplored; (2) LLMs are typically deployed zero-shot or via supervised fine-tuning, underutilizing the reasoning capabilities unlocked by reinforcement learning (RL) on verifiable rewards; (3) deployed catalogs index billions of items with non-semantic identifiers that lie outside any base-LLM vocabulary. We present GR2 (Generative Reasoning Re-Ranker), an end-to-end framework that combines (i) mid-training on semantic IDs produced by a tokenizer with >=99% uniqueness, (ii) reasoning-trace distilled from a stronger teacher via targeted prompting and rejection sampling, and (iii) RL with verifiable rewards purpose-built for re-ranking. To make GR2 resource-viable, we further (iv) introduce a context compressor that amortizes training cost, On-Policy Distillation (OPD) as a scalable alternative to SFT -- which we find collapses at industrial scale -- and reasoning distillation for low-latency serving. GR2 delivers +18.7% R@1, +7.1% R@3, and +9.6% N@3 over legacy baselines on industrial-scale traffic. We further find that reward design is critical in re-ranking: LLMs often hack rewards by preserving the incoming order or exploiting position bias, motivating conditional verifiable rewards as essential industrial components.