When Perplexity Lies: Generation-Focused Distillation of Hybrid Sequence Models

arXiv:2603.26556 · cs.CL, cs.AI · Submitted 2026-03-27 · Read on arXiv

cs.CL, cs.AI

Submitted: 2026-03-27

Updated: 2026-09-17

Comments: 13 pages, 4 figures, 4 tables

Code: https://github.com/modelscope/evalscope

License: http://creativecommons.org/licenses/by-nc-nd/4.0/

The gist: Converting a pretrained Transformer into a more efficient hybrid model through distillation offers a promising approach to reducing inference costs.

Terminology

Abstract

Converting a pretrained Transformer into a more efficient hybrid model through distillation offers a promising approach to reducing inference costs. However, achieving high-quality generation in distilled models requires careful joint design of both the student architecture and the distillation process. Many prior distillation works evaluate downstream multiple-choice benchmarks by ranking candidate answers with log-likelihood rather than requiring autoregressive generation, which can obscure important differences in model quality. For example, on overlapping benchmarks, we show that a 7B distilled model that nearly matches its teacher to within 0.2 pp under log-likelihood scoring falls behind by 20.8 pp when it must generate answers autoregressively. We investigate this phenomenon with GenDistill, a multi-stage pipeline we designed for distilling a pretrained Transformer into an efficient Hybrid Kimi Delta Attention (Hybrid-KDA) student. Using it as a controlled testbed on Qwen3-0.6B, we systematically ablate six design axes (training objective, loss masking, training duration, dataset selection, parameter freezing, and architecture choice) and evaluate every choice under both log-likelihood and generation-based protocols. We find that log-likelihood-based evaluation consistently underestimates the gap between teacher and student, and can in some cases reverse the ranking of design choices, so conclusions drawn from perplexity-only evaluation may be misleading. Among the factors we study, dataset selection, completion-only masking, and freezing attention layers during post-training have the largest impact on generation quality. Our best distillation recipe, using a Hybrid-KDA model as the student, retains 86-90% of teacher accuracy on knowledge benchmarks while reducing KV cache memory by up to 75% and improving time-to-first-token by 2-4x at 128K-token contexts.

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