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.

End-to-End Dynamic Sparsity for Resource-Adaptive LLM Inference

Large Language Models (LLMs) inference is typically deployed under a static resource assumption, where models execute a fixed computational graph regardless of the runtime environment. However, real-world cloud infrastructure is inherently dynamic, characterized by fluctuating availability (e.g., spot instance preemption) and tiered Quality-of-Service requirements. In such volatile settings, static models are inflexible: they either crash under resource constraints or waste compute on redundant operations. To bridge this gap, we propose Learning to Allocate (L2A), an end-to-end framework for resource-adaptive inference. Unlike prior methods that condition only on input difficulty, we formulate inference as a constrained allocation problem conditioned on both the input and the runtime resource budget itself. We introduce lightweight, budget-conditioned and input-aware gating networks integrated into the LLM. These gates are trained via a unified objective that jointly optimizes task performance, logical consistency, and resource costs along three axes matching how real-world dynamics manifest: layer skipping for memory and depth pressure, head pruning for throughput contention, and reasoning-token reduction for latency tightening. This lets the model learn a budget-aware policy beyond input difficulty alone: it adaptively configures its computational footprint with respect to real-time resource dynamics, maximizing reasoning depth when resources permit while enforcing strict frugality when budgets tighten. A single L2A model traces the entire compute-accuracy Pareto frontier on Llama-3-8B and Qwen-3-4B: at up to 34% realized layer sparsity, it stays within 0.6% of the dense baseline on GSM8K, with the same gap holding zero-shot on out-of-distribution tasks, while every static or heuristic baseline requires a separately tuned model and still drops by 5-10% at comparable inference time.

Bifocal Diffusion Language Models: Asymmetric Bidirectional Context for Parallel Generation

Discrete diffusion language models (dLLMs) recover masked tokens in parallel, offering significant speedups over autoregressive (AR) generation. However, such promising frameworks face a fundamental architectural design dilemma: \ding{182} Adopting bidirectional attention achieves strong generation quality by allowing each position to access the full context, but is inherently incompatible with KV caching, limiting inference throughput in batch-serving scenarios; \ding{183} Conversely, causal attention enables efficient cached inference but loses all right-side context, substantially degrading generation quality. This paper introduces Bifocal dLLMs, a new paradigm that resolves this dilemma through \emph{asymmetric bidirectional context}. Analogous to bifocal lenses, we instantiate the paradigm as \textbf{R2LM} (Right-to-Left Mamba), which combines two complementary mechanisms: $a$) standard causal attention providing precise left-context with full KV cache compatibility, while $b$) a lightweight reverse Mamba SSM sidecar supplying compressed right-side context without breaking cacheability. Comprehensive experiments on continued pretraining of Qwen3-1.7B with 60B tokens demonstrate that R2LM achieves $2.4\times$ to $12.9\times$ higher throughput than bidirectional dLLMs and $1.9\times$ to $2.9\times$ speedup over AR baselines in batch serving through parallel decoding with KV caching, while exceeding the causal baseline on most benchmarks and surpassing the bidirectional dLLM on average.

LoopFM: Learning frOm HistOrical RePresentations of Foundation Model for Recommendation

Knowledge distillation (KD) transfers a single scalar prediction from a large foundation model (FM) to compact vertical models (VMs), suffering from diminishing transfer ratio -- the fraction of FM improvement captured by the VM -- as a single scalar cannot convey the rich intermediate knowledge that larger FMs learn. To address this bottleneck, we propose LoopFM (Learning frOm HistOrical ReP*resentations of FM), a framework that opens a high-bandwidth transfer channel by structuring FM intermediate embeddings as input features (e.g., user history sequence) for downstream VMs, without requiring real-time FM inference at serving and architectural coupling between FM and VM. We provide a theoretical framework for LoopFM with a gain decomposition and transfer-ratio analysis. On three public benchmarks, LoopFM demonstrates strong AUC improvements (e.g., 6\%+ on TaobaoAd) and complementary knowledge transfer capability with KD. On industrial-scale systems (billions of examples, trillion-parameter FMs), LoopFM approximately doubles the knowledge transfer ratio on top of KD, delivering a +0.5\% conversion improvement in Y1H1, and a +1.03\% and +1.22\% conversion improvement from two individual launches respectively in Y1H2.