Large Language Models Develop Belief State Geometry In-Context

Large language models (LLMs) exhibit remarkable flexibility: they can adapt to novel tasks from in-context examples without any parameter updates, a capability known as in-context learning (ICL). Prior work on synthetic tasks has shown that ICL can implement specific algorithms, demonstrating architectural competence, and mechanistic analyses have identified key circuits that support this behavior. However, because in-context computation -- regardless of its algorithmic form -- relies on transformations in high-dimensional representation space, it remains unclear how the geometry of that space shapes ICL effectiveness. Motivated by the neuroscience view of classification as the untangling of neural representations, we hypothesize that ICL depends on the successful online untangling of task-relevant representations. To test this idea, we study how LLMs classify in-context examples whose labels are defined by the model's own internal representations with known structure. We show that ICL performance correlates systematically with the representational structure of the underlying classification task and that successful ICL is accompanied by geometric reorganization that increases online separability. We further find that LLM behavior is well described by a prototype-like algorithm that integrates evidence while reshaping representations to support classification. These findings offer a geometric account of ICL in pretrained LLMs, establish representational geometry as a mechanistic constraint on ICL, and quantify the gap between what pretrained representations afford and what in-context learning can exploit.

Large Language Models (LLMs) update their behavior in context, which can be viewed as a form of Bayesian inference. However, the structure of the latent hypothesis space over which this inference operates remains unclear. In this work, we propose that LLMs assign beliefs over a low-dimensional geometric space - a conceptual belief space - and that in-context learning corresponds to a trajectory through this space as beliefs are updated over time. Using story understanding as a natural setting for dynamic belief updating, we combine behavioral and representational analyses to study these trajectories. We find that (1) belief updates are well-described as trajectories on low-dimensional, structured manifolds; (2) this structure is reflected consistently in both model behavior and internal representations and can be decoded with simple linear probes to predict behavior; and (3) interventions on these representations causally steer belief trajectories, with effects that can be predicted from the geometry of the conceptual space. Together, our results provide a geometric account of belief dynamics in LLMs, grounding Bayesian interpretations of in-context learning in structured conceptual representations.

In-context learning (ICL) is an emerging paradigm that employs the semantic information inherent in large language models (LLMs) for generating answers to user queries. While the remarkable performance of ICL has been widely known, a general modeling and a rigorous theoretical analysis of this paradigm are still lacking. This work presents a probabilistic model for ICL and derives the performance of ICL for both general parametric distributions and exponential families. Based on the derived results, the work explains the impact of multiple factors such as the number of demonstrations, the sensitivity of the probabilistic model to the variation of its parameters, as well as the similarity between the demonstrations and the query on the performance of ICL.