Cross-Loop Query Handoff: How Later Loops Redirect Two-Hop Retrieval in the Ouro Looped Language Models

A two-hop question makes a language model retrieve twice: once to produce a bridge entity, and once to retrieve with it. Transformers resolve that entity in their early layers. Hybrid models replace most of the attention with a recurrent state, so where the key becomes usable, and where it is spent on an answer, is not known. Answering "Where is the ball?" from "the ball belongs to Alice" and "Alice is in the garden" turns on Alice, a name the question does not mention. A model could reach garden through Alice, the key it computed, or through where the fact sits in the prompt. Across twelve models, dense and hybrid, we move a hidden state from one story into another where the two routes lead to different places, and read off which place the model gives. An attention layer converts the key in every model we tested, and crossing that layer removes its usable effect, all of it where no attention follows. In sequential hybrids this makes the answer a handoff: recurrent layers carry the key forward, and attention spends it. Retrieval does not always stop there. Writing a different fact into the memory of the recurrent layers that follow the last attention layer can move the answer toward that fact, multiplying its odds by 1.3 to 2.7, and which hybrids do this is not settled by their architecture or training. That read is addressed by the key, not by position: recurrent state in a hybrid is not only a carrier, but a memory that later layers can query.

Looped language models increase effective depth by repeatedly applying a shared block of layers, but existing large-scale recipes require multi-stage training over trillions of tokens, while the benefits of recurrence remain difficult to separate from differences in data and training. In this work, we establish practical training recipes for looped language models, with three main results. (1) We develop a compute-efficient from-scratch pipeline that reduces the training budget from 7.7T tokens in Ouro to 310B tokens while retaining strong reasoning performance. Pretraining followed by high-quality mid-training, together with learning-rate warmup and stronger exit-gate regularization, enables stable recurrent training without prior multi-stage schedules. (2) Under controlled comparisons, our 1.4B LoopLM outperforms a parameter-matched dense model trained on the same data and token budget on all 12 evaluated benchmarks, including +14 points on GSM8K, +10 on MATH, and +22 on DROP. At matched inference compute, it approaches a 3.9B dense model on mathematical reasoning and reading comprehension while using only 36% as many parameters. (3) We introduce a minimal recipe for converting pretrained dense models into looped ones: a single learned input-mixing scalar and a smoothed exit loss, with no step-specific parameters. Applied to Qwen3-1.7B-Base, Looped Qwen improves over an identically continued dense baseline on every evaluated benchmark across two data regimes, with statistically clear gains on GSM8K, MATH, and MMLU-Pro on the curated mixture. Together, these results make looped language models substantially cheaper to train from scratch and practical to introduce into existing pretrained checkpoints, while isolating the gains due to recurrence itself.

Large language models achieve strong performance on many reasoning tasks when allowed to externalize intermediate steps as Chain-of-Thought (CoT). However, many questions require the model to internalize the multi-step reasoning within a single forward pass before generating the answer. We study this challenge through two-hop reasoning, a representative task where the model must compose multiple pieces of parametric knowledge within a single forward pass. Standard non-recurrent Transformers suffer from a depth-local storage problem: facts learned in earlier layers are unavailable where second-hop retrieval happens. We found that Looped Transformers mitigate this issue by reusing the same memory, but still generalize imperfectly. We show that the remaining bottleneck is representational. In the two-hop reasoning task, the first loop often makes the correct bridge entity nearly perfectly decodable, yet the corresponding hidden state remains poorly aligned with the bridge token embedding. Surprisingly, an easy training-free realignment intervention nearly closes the generalization gap. Building upon this insight, we propose DiscoLoop, a looping architecture whose recurrence carries both a discrete embedding channel and a continuous hidden-state channel. DiscoLoop achieves near-perfect accuracy with substantially fewer training steps across symbolic and synthetic-language multi-hop reasoning tasks. When applied to real-world pretraining, DiscoLoop attains lower training loss and stronger benchmark performance than looped-transformer baselines, suggesting that the mixed-channel design transfers to practical language modeling.