CLAD: Efficient Log Anomaly Detection Directly on Compressed Representations

System log anomaly detection is critical for maintaining the reliability of large-scale software systems, yet traditional methods struggle with the heterogeneous and evolving nature of modern log data. Recent advances in Large Language Models (LLMs) offer promising new approaches to log understanding, but a systematic comparison of LLM-based methods against established techniques remains lacking. In this paper, we present a comprehensive benchmark study evaluating both LLM-based and traditional approaches for log anomaly detection across four widely-used public datasets: HDFS, BGL, Thunderbird, and Spirit. We evaluate three categories of methods: (1) classical log parsers (Drain, Spell, AEL) combined with machine learning classifiers, (2) fine-tuned transformer models (BERT, RoBERTa), and (3) prompt-based LLM approaches (GPT-3.5, GPT-4, LLaMA-3) in zero-shot and few-shot settings. Our experiments reveal that while fine-tuned transformers achieve the highest F1-scores (0.96-0.99), prompt-based LLMs demonstrate remarkablezero-shot capabilities (F1: 0.82-0.91) without requiring any labeled training data -- a significant advantage for real-world deployment where labeled anomalies are scarce. We further analyze the cost-accuracy trade-offs, latency characteristics, and failure modes of each approach. Our findings provide actionable guidelines for practitioners choosing log anomaly detection methods based on their specific constraints regarding accuracy, latency, cost, and label availability. All code and experimental configurations are publicly available to facilitate reproducibility.

Modern distributed systems generate massive volumes of log data that are critical for detecting anomalies and cyber threats. However, in real world settings, these logs are often distributed across multiple organizations and cannot be centralized due to privacy and security constraints. Existing log anomaly detection methods, including recent large language model (LLM) based approaches, largely rely on centralized training and are not suitable for such environments. In this paper, we propose DP-FLogTinyLLM, a privacy preserving federated framework for log anomaly detection using parameter efficient LLMs. Our approach enables collaborative learning without sharing raw log data by integrating federated optimization with differential privacy. To ensure scalability in resource constrained environments, we employ low rank adaptation (LoRA) for efficient fine tuning of Tiny LLMs at each client. Empirical results on the Thunderbird and BGL datasets show that the proposed framework matches the performance of centralized LLM based methods, while incurring additional computational overhead due to privacy mechanisms. Compared to existing federated baselines, DP-FLogTinyLLM consistently achieves higher precision and F1-score, with particularly strong gains on the Thunderbird dataset, highlighting its effectiveness in detecting anomalies while minimizing false positives.

Detecting anomalies in large-scale system logs is critical for the reliability and security of modern computing infrastructure. We present LogNEO, a log anomaly detector built on EleutherAI's GPT-Neo (1.3B parameters) and fine-tuned with a novel partial-credit, exponentially decaying position-aware reward scheme combined with cross-entropy regularisation via Proximal Policy Optimisation (PPO). The position-aware reward explicitly models prediction difficulty: early positions receive higher rewards for correct predictions, while later positions incur stronger penalties for errors. LogNEO attains F1-scores of 0.927, 0.913, and 0.984 on the HDFS, BGL, and Thunderbird benchmarks, improving recall by up to 6 percentage points over the prior state-of-the-art LogGPT while maintaining comparable precision. A production microservice deployment over Apache Kafka, Redis, and TensorRT-accelerated inference demonstrates 45 ms end-to-end latency at 15,000 events per second.