Limits of Reliability and Scaling in Language Models

Existing scaling laws for Large Language Models (LLMs), predominantly monotonic power laws, fail to explain emerging non-monotonic phenomena such as catastrophic overtraining and quantization-induced degradation, where performance deteriorates despite increased compute. We propose the Shannon Scaling Law, a unified theoretical framework that models LLM training as information transmission over a noisy channel, grounded in the Shannon-Hartley theorem. By mapping model parameters to channel bandwidth and training tokens to signal power, our formulation explicitly captures the interaction between learning signal and intrinsic noise. This perspective reveals a fundamental Shannon capacity for LLMs: scaling model size or data without preserving a sufficient signal-to-noise ratio (SNR) inevitably amplifies noise, inducing a transition from monotonic improvement to U-shaped performance degradation. We validate our theory through experiments on Pythia and OLMo2 under perturbations, including Gaussian noise, quantization and supervised fine-tuning on math, QA and code tasks. The Shannon Scaling Law consistently outperforms classical scaling laws and recent perturbation-aware laws, achieving strong $R^2$ scores and accurately capturing loss basins missed by prior approaches. It also extrapolates: fitted on $\leq$6.9B Pythia models with $\leq$180B tokens, it predicts the unseen 12B model up to 307B tokens at pooled $R^2{=}0.847$, while monotonic baselines collapse.

Quantization is a powerful strategy to build capable and resource-efficient large language models (LLMs) by reducing the bitwidth of the parameters. While quantized LLMs achieve state-of-the-art performance on unperturbed inputs using standard predictive metrics, their performance on perturbed inputs, measured using reliability metrics, remains underexplored, despite its importance for reliable deployment. To address this gap, we first conduct a comprehensive reliability evaluation of quantized LLMs consisting of three key components: (1) Uncertainty: We assess the trustworthiness of LLMs quantized to 2, 3, 4, and 8 bits using six different quantization methods, employing established uncertainty metrics. (2) Calibration: We assess how well-calibrated the uncertainty estimates of quantized models are across model scales and bit precisions. (3) Robustness: We design character-level and word-level input perturbations to evaluate the reliability of quantized models under semantically-preserving variations in the inputs that arise in real-world applications. Second, we characterize how reliability scales with the total number of model bits. Our study reveals that while the performance scales monotonically with the total number of bits, the reliability scalings are nonlinear. A reliability peak occurs for 4-bit quantized models, indicating that quantizing moderately sized models offers the best reliability-efficiency trade-off. Additionally, our empirical findings reveal that quantization enhances the robustness of LLMs to natural input perturbations.

The scaling laws guiding modern model training were calibrated for a single regime: data-rich, single-epoch pretraining. The dominant such scaling law form, Chinchilla's $L = E + A/N^α+ B/D^β$, has three structural limitations outside that regime: it diverges as unique data shrinks instead of saturating at the uninformed baseline; it cannot represent overfitting when capacity exceeds the data; and it conflates total examples seen with unique examples available. We propose a closed-form extension, $L(N, D, T) = E + (L_0 - E)\,h/(1+h)$ with $h = a/N^α+ b/T^β+ c\,N^γ/D^δ$, that decomposes loss into undercapacity, undertraining, and overfitting terms. It saturates between the irreducible loss $E$ and an uninformed baseline $L_0$ fixed by the loss type, and reduces to Chinchilla in the data-rich, single-epoch limit. We validate it on four multi-epoch experiments spanning four architecture families (MLPs, ResNets, Fourier neural operators, and transformers) across vision, scientific ML, and language domains, and refit it to five published LLM scaling-law grids. Extrapolating to higher compute and larger unique data than seen at fit time, our form achieves state-of-the-art RMSE on every published LLM grid we evaluate and on most cells of our constructed experiments. Once calibrated, the form admits a cost-aware allocation that recovers Chinchilla's optimum when data is free and shifts toward smaller corpora and more epochs as data grows expensive.