NTILC: Neural Tool Invocation via Learned Compression

Tool calling extends large language models (LLMs) by enabling grounded interaction with external executable interfaces, thereby supporting environment-coupled problem solving. However, mainstream in-context learning (ICL) approaches typically incorporate detailed tool documentation and usage examples directly into the context. This results in substantial inference overhead and heightened risks of hallucination as the context length grows. Conversely, while tuning-based methods improve general tool-calling capabilities, they often fail to effectively internalize the specific details of previously seen tools, thereby retaining a dependency on in-context documentation. To address these limitations, we propose ParaTool, a framework that projects each tool into a dedicated, loadable set of parameters. By equipping a dynamic integration of these parameterized tools, the LLM can perform tool calling without relying on in-context documents or examples. Specifically, our approach consists of three stages: (1) parametric tool pre-training encapsulates the knowledge of different tools into independent parameter modules; (2) soft tool selection employs a gating network to dynamically weigh and aggregate relevant tool parameters; and (3) parametric tool fine-tuning jointly updates tool parameters to align the training and inference processes. Experiments on Stable ToolBench and BFCL demonstrate that ParaTool significantly outperforms strong ICL-based baselines, achieving superior performance while reducing computational complexity.

Tool-augmented LLM agents tend to call tools indiscriminately, even when the model can answer directly. Each unnecessary call wastes API fees and latency, yet no existing benchmark systematically studies when a tool call is actually needed. We propose When2Tool, a benchmark of 18 environments (15 single-hop, 3 multi-hop) spanning three categories of tool necessity -- computational scale, knowledge boundaries, and execution reliability -- each with controlled difficulty levels that create a clear decision boundary between tool-necessary and tool-unnecessary tasks. We evaluate two families of training-free baselines: Prompt-only (varying the prompt to discourage unnecessary calls) and Reason-then-Act (requiring the model to reason about tool necessity before acting). Both provide limited control: Prompt-only suppresses necessary calls alongside unnecessary ones, and Reason-then-Act still incurs a disproportionate accuracy cost on hard tasks. To understand why these baselines fail, we probe the models' hidden states and find that tool necessity is linearly decodable from the pre-generation representation with AUROC 0.89--0.96 across six models, substantially exceeding the model's own verbalized reasoning. This reveals that models already know when tools are needed, but fail to act on this knowledge during generation. Building on this finding, we propose Probe&Prefill, which uses a lightweight linear probe to read the hidden-state signal and prefills the model's response with a steering sentence. Across all models tested, Probe&Prefill reduces tool calls by 48% with only 1.7% accuracy loss, while the best baseline at comparable accuracy only reduces 6% of tool calls, or achieves a similar tool call reduction but incurs a 5$\times$ higher accuracy loss. Our code is available at https://github.com/Trustworthy-ML-Lab/when2tool

Agentic RAG systems that equip language models with dozens to hundreds of tool definitions face a critical resource conflict: tool schemas consume the same context window needed for retrieval-augmented generation. We present the first systematic study of this tool-context trade-off, evaluating 14 models spanning 1.5B-32B local models plus one frontier API model across 6,566 controlled API calls at three context budgets (8K, 16K, 32K) with 28 tool definitions. Applying TSCG conservative-profile compression (44-50% schema token savings), we observe a binary enablement effect: at 8K tokens, JSON-schema tool definitions overflow the context window entirely, yielding near-zero EM (2.6% average), while compressed schemas restore RAG functionality with +20.5 pp average exact-match lift across all eight models (+24.7 pp among the six exhibiting full enablement). At 32K -- where both formats fit -- four of five tested models show delta <= 1 pp, confirming the effect is purely budget-driven. External validation on HotpotQA (50 multi-hop questions) shows +48 pp EM under the same overflow scenario. Frontier scaling tests demonstrate that JSON schemas overflow at ~494 tools while compressed schemas remain operational beyond 800 tools. Our results establish tool-schema compression as a necessary infrastructure layer for agentic RAG in constrained-context deployments. All code, data, and checkpoints are publicly available.