RouteNLP: Closed-Loop LLM Routing with Conformal Cascading and Distillation Co-Optimization
Authors: Dongxin Guo, Jikun Wu, Siu Ming Yiu
Organizations: 1The University of Hong Kong · 2Stellaris AI Limited
Abstract
Serving diverse NLP workloads with large language models is costly: at one enterprise partner, inference costs exceeded $200K/month despite over 70% of queries being routine tasks well within the capability of smaller models. We present RouteNLP, a closed-loop framework that routes queries across a tiered model portfolio to minimize cost while satisfying per-task quality constraints. The framework integrates three components: a difficulty-aware router with shared task-conditioned representations trained on preference data and quality signals; confidence-calibrated cascading that uses conformal prediction for distribution-free threshold initialization; and a distillation-routing co-optimization loop that clusters escalation failures, applies targeted knowledge distillation to cheaper models, and automatically retrains the router, yielding over twice the cost improvement of untargeted distillation. In an 8-week pilot deployment processing ~5K queries/day at an enterprise customer-service division, RouteNLP reduced inference costs by 58% while maintaining 91% response acceptance and reducing p99 latency from 1,847 ms to 387 ms. On a six-task benchmark spanning finance, customer service, and legal domains, the framework achieves 40-85% cost reduction while retaining 96-100% quality on structured tasks and 96-98% on generation tasks, with human evaluation confirming that 74.5% of routed generation outputs match or exceed frontier-model quality.
Efficient deployment of large language models (LLMs) in production forces a trade-off between accuracy and cost. Operators often default to a single model that is either expensive for easy queries or insufficient for hard ones. To address this challenge, we propose a two-stage cascaded solution. Stage 1 clusters incoming queries and assigns each cluster to its most cost-effective model. The cost budget for this routing process is set by an interpretable hyperparameter, tuned offline. Stage 2 adds a quality estimation (QE) cascade; when an output from Stage 1 is judged low-quality, the query is escalated to a stronger model. This ensures only hard or low-confidence cases reach the expensive models. On the test datasets, the cascaded system retains 97-99% of the strongest model's accuracy while reducing Time Per Output Token (TPOT). It requires only task-correctness labels and adapts to changes in the model pool without manual reconfiguration.
No single large language model (LLM) is optimal across all queries and budget constraints, making model routing essential for cost-effective deployment. Existing routers adopt diverse formulations and implementations, making fair comparison and extension difficult. We present a unified formulation of LLM routing as a sequential decision process characterized by five components: context encoders, model encoders, scoring functions, decision rules, and learning signals, covering single-turn, multi-turn, and personalized routing. Based on this formulation, we develop an automated pipeline for constructing routing supervision and evaluating routers jointly on response quality and inference cost. The resulting benchmark, xRouteBench, spans generic LLM, memory-augmented, vision, time-series, and personalized routing tasks. We further introduce LLMRouter, an open-source modular infrastructure with more than 16 representative routers. Our empirical study shows that learned routers outperform the strongest fixed-model baseline by 14.6% relatively, lightweight routers become more competitive under tight cost constraints, and user-conditioned routing consistently improves personalization.
Inference costs for large language model (LLM) applications are rapidly growing, driven by surging demand and rising infrastructure cost. Users expect high-quality responses, and in commercial settings this is formally codified in Service Level Agreements (SLAs), creating a fundamental tension between cost and quality. Recent progress on cost-aware LLM request routing has shown potential to resolve this tension, but existing approaches rely on complete feedback signals, offline training, extensive per-workload tuning, and most lack SLA guarantees or inference-time adaptivity. We introduce SLARouter, an online routing algorithm that learns a cost-optimal policy from the sparse, one-sided user feedback available in production systems. SLARouter provides theoretical guarantees for both cost optimality and strict SLA compliance. Experiments across a wide range of LLM benchmarks show that SLARouter satisfies SLA constraints without the need for per-benchmark tuning, reducing operating cost by up to 2.2x over existing baselines.
Herbert Woisetschläger, Arastun Mammadli, Ryan Zhang +1