KDFP: A first-principles approach to knowledge distillation in large language models

Small language models are often the only option for deployment under tight latency, cost, and on-premises constraints, but they are rarely trained from scratch: a compressed model is usually recovered through knowledge distillation (KD). This recovery step largely decides the final quality, yet it is expensive. We present a practitioner's study of how to make distillation training efficient, organised around two systems contributions. First, we show that offline KD (caching the teacher's top-$K$ logits once and training the student against the cache) matches online distillation at near-identical training loss while removing the teacher from memory, running about 29% faster per iteration, and reaching up to 41% higher throughput on a single H200 GPU. Second, we introduce a \emph{fused, chunked KL loss} that never materialises the full vocabulary-sized logit tensor, making peak memory linear in the sequence length. This removes the memory spike that otherwise caps context length and lets us train at four times the context (32{,}768 tokens) on a single GPU. A separate output-head-only toy benchmark isolates the loss kernel and confirms its memory and iteration-rate scaling from 4K to 256K tokens. Together these make large-scale healing and hundreds of ablations affordable. We also report supporting ablations on loss design and sequence packing. We release our chunked-loss implementation: https://github.com/CompactifAI/Full-Chunked-KL-Loss.

Knowledge distillation (KD) is widely used to compress and post-train large language models (LLMs), yet many existing frameworks execute teacher inference with the same training-oriented backend as student optimization, leading to suboptimal efficiency. In this paper, we propose KDFlow, a novel framework for LLM distillation that features a decoupled architecture and employs SGLang for teacher inference. KDFlow combines SGLang for teacher inference with PyTorch FSDP2 for student optimization, allowing each model to run on a backend tailored to its workload. To enable efficient full-vocabulary distillation in this decoupled architecture, KDFlow transfers the teacher's final hidden states via Ray's object store and recomputes teacher logits on each student worker using a frozen copy of the teacher's output head. Furthermore, our framework supports both off-policy and on-policy distillation and incorporates cross-tokenizer algorithms through highly extensible and user-friendly APIs. Experiments show that KDFlow achieves a 1.44$\times$ to 6.36$\times$ speedup over MS-SWIFT in off-policy distillation and a 1.43$\times$ to 1.75$\times$ speedup over verl in on-policy distillation. KDFlow further scales to 64 GPUs, achieving 3.68$\times$ and 2.52$\times$ strong-scaling speedups in two representative model configurations. The code and documentation are publicly available.

Large language models (LLMs) achieve strong performance across many tasks, but their high computational cost limits deployment in resource-constrained environments. Knowledge Distillation (KD) offers a practical solution by transferring knowledge from a teacher model of a larger size to a smaller student model. While prior work has mainly examined task-specific or small-scale settings, the post-training stage for building general instruction-following models has received limited attention. In this paper, we conduct a systematic study of KD in post-training using the large-scale Tulu 3 dataset. We find that KD outperforms supervised fine-tuning (SFT) in low-data regimes, but its advantage diminishes as more training data is added. Distilling from a stronger instruction-tuned teacher restores substantial gains even with abundant data, indicating that KD remains effective when the teacher provides knowledge that the student cannot easily acquire from the training data alone. We further study domain-specific, low-resource scenarios and propose a two-stage KD strategy that leverages synthetic teacher-labeled data followed by refinement on human annotations. This method consistently improves student performance, providing practical guidance for building compact models in data-scarce environments.