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Advanced Fine-Tuning

Distillation and Synthetic Data

Use strong models to create data and train smaller systems for cost, latency, and specialization

30 min read· distillation· synthetic data· fine-tuning· small models

Distillation and Synthetic Data

Distillation transfers behavior from a stronger teacher model into a smaller or cheaper student system.

Synthetic data uses models to create examples for training, evaluation, or red-teaming.

Why this matters

Frontier models are powerful but can be expensive for high-volume narrow tasks. A smaller model trained on excellent examples may be:

  • faster
  • cheaper
  • easier to deploy privately
  • more consistent for a narrow format
  • good enough for routine cases

Distillation workflow

text
collect real task examples
  -> ask teacher model for ideal outputs
  -> filter and deduplicate
  -> add hard negatives and edge cases
  -> fine-tune student model
  -> evaluate against held-out data
  -> route only suitable traffic to student

Synthetic data quality checks

  • remove duplicates
  • verify labels
  • balance classes
  • include refusals/no-answer cases
  • include adversarial examples
  • keep a human-reviewed holdout set
  • avoid training on test examples

Good uses

UseExample
Format imitationconvert support tickets into a standard JSON shape
Domain tonewrite in a company's support style
Tool callinglearn when to call which function
Edge casesgenerate rare failure scenarios for evals
Cost reductionroute easy cases to a smaller model

Bad uses

  • fabricating facts that should come from a database
  • replacing expert review for high-stakes labels
  • training on private data without permission
  • mixing synthetic train and test data
  • assuming the teacher is always correct

Knowledge check

Q1: What is the biggest risk of synthetic data?
It can amplify teacher mistakes or create unrealistic examples if not filtered.

Q2: When is distillation useful?
When a narrower, cheaper student model can pass evals for a repeated task.