# Reasoning with Latent Thoughts: On the Power of Looped Transformers

arXiv: https://arxiv.org/abs/2502.17416 · HTML: https://mlsanity.com/paper/2502.17416/

## Key facts

- Cited by 240 papers in the map (data through 14 Oct 2026).
- Placed in Test-time compute and efficient thinking, one of 17 directions in LLM reasoning.
- Builds on 45 of its 65 references that are in the map.
- First posted on arXiv 24 Feb 2025.

## Placed in

- LLM reasoning / [Test-time compute and efficient thinking](https://mlsanity.com/lr/test-time-compute-and-efficient-thinking/)

## Builds on (most cited first, 30 of 45)

- [Language Models are Few-Shot Learners](https://mlsanity.com/paper/2005.14165/) (2020)
- [Chain-of-Thought Prompting Elicits Reasoning in Large Language Models](https://mlsanity.com/paper/2201.11903/) (2022)
- [Scaling Laws for Neural Language Models](https://mlsanity.com/paper/2001.08361/) (2020)
- [DeepSeek-R1: Incentivizing Reasoning Capability in LLMs via Reinforcement Learning](https://mlsanity.com/paper/2501.12948/) (2025)
- [Training Compute-Optimal Large Language Models](https://mlsanity.com/paper/2203.15556/) (2022)
- [TriviaQA: A Large Scale Distantly Supervised Challenge Dataset for Reading Comprehension](https://mlsanity.com/paper/1705.03551/) (2017)
- [ALBERT: A Lite BERT for Self-supervised Learning of Language Representations](https://mlsanity.com/paper/1909.11942/) (2019)
- [Emergent Abilities of Large Language Models](https://mlsanity.com/paper/2206.07682/) (2022)
- [The Pile: An 800GB Dataset of Diverse Text for Language Modeling](https://mlsanity.com/paper/2101.00027/) (2020)
- [Know What You Don't Know: Unanswerable Questions for SQuAD](https://mlsanity.com/paper/1806.03822/) (2018)
- [Adafactor: Adaptive Learning Rates with Sublinear Memory Cost](https://mlsanity.com/paper/1804.04235/) (2018)
- [DROP: A Reading Comprehension Benchmark Requiring Discrete Reasoning Over Paragraphs](https://mlsanity.com/paper/1903.00161/) (2019)
- [Show Your Work: Scratchpads for Intermediate Computation with Language Models](https://mlsanity.com/paper/2112.00114/) (2021)
- [Are NLP Models really able to Solve Simple Math Word Problems?](https://mlsanity.com/paper/2103.07191/) (2021)
- [CoQA: A Conversational Question Answering Challenge](https://mlsanity.com/paper/1808.07042/) (2018)
- [The Implicit Bias of Gradient Descent on Separable Data](https://mlsanity.com/paper/1710.10345/) (2017)
- [Universal Transformers](https://mlsanity.com/paper/1807.03819/) (2018)
- [Deep Equilibrium Models](https://mlsanity.com/paper/1909.01377/) (2019)
- [TyDi QA: A Benchmark for Information-Seeking Question Answering in Typologically Diverse Languages](https://mlsanity.com/paper/2003.05002/) (2020)
- [The Web as a Knowledge-base for Answering Complex Questions](https://mlsanity.com/paper/1803.06643/) (2018)
- [QuAC : Question Answering in Context](https://mlsanity.com/paper/1808.07036/) (2018)
- [A Diverse Corpus for Evaluating and Developing English Math Word Problem Solvers](https://mlsanity.com/paper/2106.15772/) (2021)
- [UL2: Unifying Language Learning Paradigms](https://mlsanity.com/paper/2205.05131/) (2022)
- [Towards Revealing the Mystery behind Chain of Thought: A Theoretical Perspective](https://mlsanity.com/paper/2305.15408/) (2023)
- [Transformers Learn Shortcuts to Automata](https://mlsanity.com/paper/2210.10749/) (2022)
- [Chain of Thought Empowers Transformers to Solve Inherently Serial Problems](https://mlsanity.com/paper/2402.12875/) (2024)
- [Looped Transformers as Programmable Computers](https://mlsanity.com/paper/2301.13196/) (2023)
- [MobileLLM: Optimizing Sub-billion Parameter Language Models for On-Device Use Cases](https://mlsanity.com/paper/2402.14905/) (2024)
- [The Parallelism Tradeoff: Limitations of Log-Precision Transformers](https://mlsanity.com/paper/2207.00729/) (2022)
- [Looped Transformers are Better at Learning Learning Algorithms](https://mlsanity.com/paper/2311.12424/) (2023)

## Built on by (most cited first, 30 of 240)

- [Stop Overthinking: A Survey on Efficient Reasoning for Large Language Models](https://mlsanity.com/paper/2503.16419/) (2025)
- [Towards Reasoning Era: A Survey of Long Chain-of-Thought for Reasoning Large Language Models](https://mlsanity.com/paper/2503.09567/) (2025)
- [CODI: Compressing Chain-of-Thought into Continuous Space via Self-Distillation](https://mlsanity.com/paper/2502.21074/) (2025)
- [A Survey on Test-Time Scaling in Large Language Models: What, How, Where, and How Well?](https://mlsanity.com/paper/2503.24235/) (2025)
- [Dynamic Early Exit in Reasoning Models](https://mlsanity.com/paper/2504.15895/) (2025)
- [Reasoning Models Can Be Effective Without Thinking](https://mlsanity.com/paper/2504.09858/) (2025)
- [Scaling Latent Reasoning via Looped Language Models](https://mlsanity.com/paper/2510.25741/) (2025)
- [Mixture-of-Recursions: Learning Dynamic Recursive Depths for Adaptive Token-Level Computation](https://mlsanity.com/paper/2507.10524/) (2025)
- [Thinkless: LLM Learns When to Think](https://mlsanity.com/paper/2505.13379/) (2025)
- [Efficient Reasoning Models: A Survey](https://mlsanity.com/paper/2504.10903/) (2025)
- [Think Silently, Think Fast: Dynamic Latent Compression of LLM Reasoning Chains](https://mlsanity.com/paper/2505.16552/) (2025)
- [A Survey on Latent Reasoning](https://mlsanity.com/paper/2507.06203/) (2025)
- [Reasoning Beyond Language: A Comprehensive Survey on Latent Chain-of-Thought Reasoning](https://mlsanity.com/paper/2505.16782/) (2025)
- [SIM-CoT: Supervised Implicit Chain-of-Thought](https://mlsanity.com/paper/2509.20317/) (2025)
- [BREAD: Branched Rollouts from Expert Anchors Bridge SFT & RL for Reasoning](https://mlsanity.com/paper/2506.17211/) (2025)
- [Cache-to-Cache: Direct Semantic Communication Between Large Language Models](https://mlsanity.com/paper/2510.03215/) (2025)
- [LoopFormer: Elastic-Depth Looped Transformers for Latent Reasoning via Shortcut Modulation](https://mlsanity.com/paper/2602.11451/) (2026)
- [Parcae: Scaling Laws For Stable Looped Language Models](https://mlsanity.com/paper/2604.12946/) (2026)
- [A Little Depth Goes a Long Way: The Expressive Power of Log-Depth Transformers](https://mlsanity.com/paper/2503.03961/) (2025)
- [Teaching Pretrained Language Models to Think Deeper with Retrofitted Recurrence](https://mlsanity.com/paper/2511.07384/) (2025)
- [PonderLM: Pretraining Language Models to Ponder in Continuous Space](https://mlsanity.com/paper/2505.20674/) (2025)
- [Implicit Reasoning in Large Language Models: A Comprehensive Survey](https://mlsanity.com/paper/2509.02350/) (2025)
- [Soft Tokens, Hard Truths](https://mlsanity.com/paper/2509.19170/) (2025)
- [Scalable Chain of Thoughts via Elastic Reasoning](https://mlsanity.com/paper/2505.05315/) (2025)
- [A Mechanistic Analysis of Looped Reasoning Language Models](https://mlsanity.com/paper/2604.11791/) (2026)
- [Coevolutionary Continuous Discrete Diffusion: Make Your Diffusion Language Model a Latent Reasoner](https://mlsanity.com/paper/2510.03206/) (2025)
- [Energy-Based Transformers are Scalable Learners and Thinkers](https://mlsanity.com/paper/2507.02092/) (2025)
- [LaDiR: Latent Diffusion Enhances LLMs for Text Reasoning](https://mlsanity.com/paper/2510.04573/) (2025)
- [Fixed-Point Reasoners: Stable and Adaptive Deep Looped Transformers](https://mlsanity.com/paper/2606.18206/) (2026)
- [Parallel Continuous Chain-of-Thought with Jacobi Iteration](https://mlsanity.com/paper/2506.18582/) (2025)

## Abstract (arXiv)

Large language models have shown remarkable reasoning abilities and scaling laws suggest that large parameter count, especially along the depth axis, is the primary driver. In this work, we make a stronger claim -- many reasoning problems require a large depth but not necessarily many parameters. This unlocks a novel application of looped models for reasoning. Firstly, we show that for many synthetic reasoning problems like addition, p-hop induction, and math problems, a k-layer transformer looped L times nearly matches the performance of a kL-layer non-looped model, and is significantly better than a k-layer model. This is further corroborated by theoretical results showing that many such reasoning problems can be solved via iterative algorithms, and thus, can be solved effectively using looped models with nearly optimal depth. Perhaps surprisingly, these benefits also translate to practical settings of language modeling -- on many downstream reasoning tasks, a language model with k-layers looped L times can be competitive to, if not better than, a kL-layer language model. In fact, our empirical analysis reveals an intriguing phenomenon: looped and non-looped models exhibit scaling behavior that depends on their effective depth, akin to the inference-time scaling of chain-of-thought (CoT) reasoning. We further elucidate the connection to CoT reasoning by proving that looped models implicitly generate latent thoughts and can simulate T steps of CoT with T loops. Inspired by these findings, we also present an interesting dichotomy between reasoning and memorization, and design a looping-based regularization that is effective on both fronts.