Title: Fed-SB: A Silver Bullet for Extreme Communication Efficiency and Performance in (Private) Federated LoRA Fine-Tuning
Primary area: transfer learning, meta learning, and lifelong learning
Keywords: LoRA, Low-rank adaptation, Fine-tuning, Federated fine-tuning, Foundation Models

Abstract: Low-Rank Adaptation (LoRA) has become ubiquitous for efficiently fine-tuning foundation models.  However, federated fine-tuning using LoRA is challenging due to suboptimal updates arising from traditional federated averaging of individual adapters. Existing solutions either incur prohibitively high communication cost that scales linearly with the number of clients or suffer from performance degradation due to limited expressivity. We introduce **Federated Silver Bullet (Fed-SB)**, a novel approach for federated fine-tuning of LLMs using LoRA-SB, a recently proposed low-rank adaptation method. LoRA-SB optimally aligns the optimization trajectory with the ideal low-rank full fine-tuning projection by learning a small square matrix ($R$) between adapters $B$ and $A$, keeping other components fixed. Direct averaging of $R$ guarantees exact updates, substantially reducing communication cost, which remains independent of the number of clients, and enables scalability. Fed-SB achieves **state-of-the-art performance** across commonsense reasoning, arithmetic reasoning, and language inference tasks while reducing communication costs by up to **230x**. In private settings, Fed-SB further improves performance by (1) reducing trainable parameters, thereby lowering the noise required for differential privacy and (2) avoiding noise amplification introduced by other methods. Overall, Fed-SB offers a state-of-the-art, efficient, and scalable solution for both private and non-private federated fine-tuning. Our code is available anonymously at: https://anonymous.4open.science/r/fed-sb-anonymous-6F3D.