Implicit Reasoning in Language Models

Chain-of-Thought (CoT) empowers Large Language Models (LLMs) to tackle complex problems, but remains constrained by the computational cost and early token commitments in discrete reasoning traces. Recent latent reasoning approaches attempt to optimize efficiency by performing reasoning within continuous hidden states. However, many such methods optimize latent states end to end without a trained interface for intermediate textual readout, and several representative configurations use a pre-defined number of latent steps during inference. In this work, we introduce \textbf{PLaT} (\textbf{P}lanning with \textbf{La}tent \textbf{T}houghts), a framework that decouples latent planning from verbalization. The Planner deterministically evolves latent planning states, while an independent Decoder provides textual readouts when needed. Answer-aware textual stopping allows the latent rollout to use a problem-dependent number of groups rather than a pre-specified chain length. PLaT achieves competitive coverage at larger $k$ in several mathematical settings, with lower Pass@1: on Llama-1B GSM8K, it reaches 80.59% Pass@128 versus CODI's 72.37%. These results support PLaT as a candidate-generation interface supplying multiple textual readouts for downstream verification or reranking.

Modern LLMs are trained to "think" primarily via explicit text generation, such as chain-of-thought (CoT), which defers reasoning to post-training and under-leverages pre-training data. We present and open-source Ouro, named after the recursive Ouroboros, a family of pre-trained Looped Language Models (LoopLM) that instead build reasoning into the pre-training phase through (i) iterative computation in latent space, (ii) an entropy-regularized objective for learned depth allocation, and (iii) scaling to 7.7T tokens. Ouro 1.4B and 2.6B models enjoy superior performance that match the results of up to 12B SOTA LLMs across a wide range of benchmarks. Through controlled experiments, we show this advantage stems not from increased knowledge capacity, but from superior knowledge manipulation capabilities. We also show that LoopLM yields reasoning traces more aligned with final outputs than explicit CoT. We hope our results show the potential of LoopLM as a novel scaling direction in the reasoning era. Our model is available here: http://ouro-llm.github.io.

Recent language models exhibit significant logical reasoning abilities, yet the mechanisms supporting deductive inference remain poorly understood. This paper studies small transformer-based language models trained from scratch on multi-step deductive tasks, focusing on the distinction between horizontal reasoning, where intermediate steps are generated autoregressively, and vertical reasoning, where inference unfolds implicitly across layers before the first output token is produced. We analyze two synthetic tasks: logical consequence over chains of symbolic implications and root-to-leaf navigation in binary trees. Mechanistic interpretability reveals that Chain-of-Thought supervision enables models to learn rule-based inference rather than statistical shortcuts. In the horizontal setting, a shallow attention-only model develops interpretable circuits for rule completion, rule chaining, and final decision making, largely implemented through induction-head-like mechanisms. We further introduce a truncated pseudoinverse method to decode the information carried by queries, keys, and values. For vertical reasoning, Chain-of-Thought appears to act less as explicit step-by-step guidance and more as a form of curriculum learning, helping the model acquire increasingly complex reasoning patterns. Without Chain-of-Thought, models tend to memorize or exploit dataset biases. These results provide a low-level account of how transformers can implement deductive reasoning and suggest how Chain-of-Thought may serve different functions in horizontal and vertical reasoning.