FedSRD: Sparsify-Reconstruct-Decompose for Communication-Efficient Federated Large Language Models Fine-Tuning

arXiv:2510.04601v3 Announce Type: replace Abstract: The current paradigm of training large language models (LLMs) on public available Web data is becoming unsustainable as high-quality data sources in specialized domains near exhaustion. Federated Learning (FL) emerges as a practical solution for the next generation of AI on a decentralized Web, enabling privacy-preserving collaborative fine-tuning on decentralized private data. While Low-Rank Adaptation (LoRA) is standard for efficient fine-tuning, its federated application faces a critical bottleneck: communication overhead under heterogeneous network conditions. Structural redundancy in LoRA parameters increases communication costs and causes aggregation conflicts. To address this, we propose FedSRD, a Sparsify-Reconstruct-Decompose framework for communication-efficient federated LLM fine-tuning. We introduce importance-aware sparsification to reduce the upload parameter count while preserving the structural integrity of LoRA updates. The server aggregates updates in full-rank space to mitigate conflicts, then decomposes the global update into a sparse low-rank format for broadcast, ensuring a symmetrically efficient cycle. We also propose an efficient variant, FedSRD-e, to reduce computational overhead. Experiments on 10 benchmarks show our framework significantly reduces communication costs by up to 90\% while improving performance on heterogeneous client data.