# Small Language Models are the Future of Agentic AI

arXiv: https://arxiv.org/abs/2506.02153 · HTML: https://mlsanity.com/paper/2506.02153/

## Key facts

- Cited by 270 papers in the map (data through 14 Oct 2026).
- Placed in General LLM agent frameworks and benchmarks, one of 16 directions in LLM agents and tool use.
- Builds on 38 of its 79 references that are in the map.
- First posted on arXiv 2 Jun 2025.

## Placed in

- LLM agents and tool use / [General LLM agent frameworks and benchmarks](https://mlsanity.com/agents/general-llm-agent-frameworks-and-benchmarks/)

## Builds on (most cited first, 30 of 38)

- [LoRA: Low-Rank Adaptation of Large Language Models](https://mlsanity.com/paper/2106.09685/) (2021)
- [DeepSeek-R1: Incentivizing Reasoning Capability in LLMs via Reinforcement Learning](https://mlsanity.com/paper/2501.12948/) (2025)
- [Toolformer: Language Models Can Teach Themselves to Use Tools](https://mlsanity.com/paper/2302.04761/) (2023)
- [QLoRA: Efficient Finetuning of Quantized LLMs](https://mlsanity.com/paper/2305.14314/) (2023)
- [Training Compute-Optimal Large Language Models](https://mlsanity.com/paper/2203.15556/) (2022)
- [Phi-3 Technical Report: A Highly Capable Language Model Locally on Your Phone](https://mlsanity.com/paper/2404.14219/) (2024)
- [Least-to-Most Prompting Enables Complex Reasoning in Large Language Models](https://mlsanity.com/paper/2205.10625/) (2022)
- [τ-bench: A Benchmark for Tool-Agent-User Interaction in Real-World Domains](https://mlsanity.com/paper/2406.12045/) (2024)
- [Improving language models by retrieving from trillions of tokens](https://mlsanity.com/paper/2112.04426/) (2021)
- [Instruction-Following Evaluation for Large Language Models](https://mlsanity.com/paper/2311.07911/) (2023)
- [DoRA: Weight-Decomposed Low-Rank Adaptation](https://mlsanity.com/paper/2402.09353/) (2024)
- [A Comprehensive Overview of Large Language Models](https://mlsanity.com/paper/2307.06435/) (2023)
- [tinyBenchmarks: evaluating LLMs with fewer examples](https://mlsanity.com/paper/2402.14992/) (2024)
- [Scaling Laws for Transfer](https://mlsanity.com/paper/2102.01293/) (2021)
- [Deja Vu: Contextual Sparsity for Efficient LLMs at Inference Time](https://mlsanity.com/paper/2310.17157/) (2023)
- [PowerInfer: Fast Large Language Model Serving with a Consumer-grade GPU](https://mlsanity.com/paper/2312.12456/) (2023)
- [Large Language Model Agent: A Survey on Methodology, Applications and Challenges](https://mlsanity.com/paper/2503.21460/) (2025)
- [Security and Privacy Challenges of Large Language Models: A Survey](https://mlsanity.com/paper/2402.00888/) (2024)
- [The Landscape of Emerging AI Agent Architectures for Reasoning, Planning, and Tool Calling: A Survey](https://mlsanity.com/paper/2404.11584/) (2024)
- [A Comprehensive Survey of Small Language Models in the Era of Large Language Models: Techniques, Enhancements, Applications, Collaboration with LLMs, and Trustworthiness](https://mlsanity.com/paper/2411.03350/) (2024)
- [Small Language Models: Survey, Measurements, and Insights](https://mlsanity.com/paper/2409.15790/) (2024)
- [xLAM: A Family of Large Action Models to Empower AI Agent Systems](https://mlsanity.com/paper/2409.03215/) (2024)
- [PowerInfer-2: Fast Large Language Model Inference on a Smartphone](https://mlsanity.com/paper/2406.06282/) (2024)
- [Nemotron-H: A Family of Accurate and Efficient Hybrid Mamba-Transformer Models](https://mlsanity.com/paper/2504.03624/) (2025)
- [Hymba: A Hybrid-head Architecture for Small Language Models](https://mlsanity.com/paper/2411.13676/) (2024)
- [On Protecting the Data Privacy of Large Language Models (LLMs): A Survey](https://mlsanity.com/paper/2403.05156/) (2024)
- [MatFormer: Nested Transformer for Elastic Inference](https://mlsanity.com/paper/2310.07707/) (2023)
- [Nemotron-CLIMB: CLustering-based Iterative Data Mixture Bootstrapping for Language Model Pre-training](https://mlsanity.com/paper/2504.13161/) (2025)
- [Flextron: Many-in-One Flexible Large Language Model](https://mlsanity.com/paper/2406.10260/) (2024)
- [Privacy-Preserving Instructions for Aligning Large Language Models](https://mlsanity.com/paper/2402.13659/) (2024)

## Built on by (most cited first, 30 of 270)

- [EmbeddingGemma: Powerful and Lightweight Text Representations](https://mlsanity.com/paper/2509.20354/) (2025)
- [Tongyi DeepResearch Technical Report](https://mlsanity.com/paper/2510.24701/) (2025)
- [Towards General Agentic Intelligence via Environment Scaling](https://mlsanity.com/paper/2509.13311/) (2025)
- [ToolOrchestra: Elevating Intelligence via Efficient Model and Tool Orchestration](https://mlsanity.com/paper/2511.21689/) (2025)
- [CodeEvolve: an open source evolutionary coding agent for algorithmic discovery and optimization](https://mlsanity.com/paper/2510.14150/) (2025)
- [The Cost of Dynamic Reasoning: Demystifying AI Agents and Test-Time Scaling from an AI Infrastructure Perspective](https://mlsanity.com/paper/2506.04301/) (2025)
- [ARE: Scaling Up Agent Environments and Evaluations](https://mlsanity.com/paper/2509.17158/) (2025)
- [Self-Improving LLM Agents at Test-Time](https://mlsanity.com/paper/2510.07841/) (2025)
- [LLM-based Agentic Reasoning Frameworks: A Survey from Methods to Scenarios](https://mlsanity.com/paper/2508.17692/) (2025)
- [Adaptation of Agentic AI: A Survey of Post-Training, Memory, and Skills](https://mlsanity.com/paper/2512.16301/) (2025)
- [Rethinking the Value of Multi-Agent Workflow: A Strong Single Agent Baseline](https://mlsanity.com/paper/2601.12307/) (2026)
- [Virtual Agent Economies](https://mlsanity.com/paper/2509.10147/) (2025)
- [When AIs Judge AIs: The Rise of Agent-as-a-Judge Evaluation for LLMs](https://mlsanity.com/paper/2508.02994/) (2025)
- [Ferret-UI Lite: Lessons from Building Small On-Device GUI Agents](https://mlsanity.com/paper/2509.26539/) (2025)
- [AssetOpsBench: Benchmarking AI Agents for Task Automation in Industrial Asset Operations and Maintenance](https://mlsanity.com/paper/2506.03828/) (2025)
- [Agent Exchange: Shaping the Future of AI Agent Economics](https://mlsanity.com/paper/2507.03904/) (2025)
- [MatSciBench: Benchmarking the Reasoning Ability of Large Language Models in Materials Science](https://mlsanity.com/paper/2510.12171/) (2025)
- [Security Threat Modeling for Emerging AI-Agent Protocols: A Comparative Analysis of MCP, A2A, Agora, and ANP](https://mlsanity.com/paper/2602.11327/) (2026)
- [Training Language Models via Neural Cellular Automata](https://mlsanity.com/paper/2603.10055/) (2026)
- [Intelligence per Watt: Measuring Intelligence Efficiency of Local AI](https://mlsanity.com/paper/2511.07885/) (2025)
- [The Collaboration Gap: Exploration and Benchmarking of Open-World Agentic Cooperation](https://mlsanity.com/paper/2511.02687/) (2025)
- [APTBench: Benchmarking Agentic Potential of Base LLMs During Pre-Training](https://mlsanity.com/paper/2510.24397/) (2025)
- [From the Fluency Fallacy to the Micro-to-Macro Validity Gap: Opportunities and Pitfalls of LLMs in Social Simulation](https://mlsanity.com/paper/2507.19364/) (2025)
- [AutoTool: Efficient Tool Selection for Large Language Model Agents](https://mlsanity.com/paper/2511.14650/) (2025)
- [Youtu-LLM: Unlocking the Native Agentic Potential for Lightweight Large Language Models](https://mlsanity.com/paper/2512.24618/) (2025)
- [Robust Tool Use via Fission-GRPO: Learning to Recover from Execution Errors](https://mlsanity.com/paper/2601.15625/) (2026)
- [Klear-AgentForge: Forging Agentic Intelligence through Posttraining Scaling](https://mlsanity.com/paper/2511.05951/) (2025)
- [Tiny Model, Big Logic: Diversity-Driven Optimization Elicits Large-Model Reasoning Ability in VibeThinker-1.5B](https://mlsanity.com/paper/2511.06221/) (2025)
- [SpeakRL: Synergizing Reasoning, Speaking, and Acting in Language Models with Reinforcement Learning](https://mlsanity.com/paper/2512.13159/) (2025)
- [An Information Theoretic Perspective on Agentic System Design](https://mlsanity.com/paper/2512.21720/) (2025)

## Abstract (arXiv)

Large language models (LLMs) are often praised for exhibiting near-human performance on a wide range of tasks and valued for their ability to hold a general conversation. The rise of agentic AI systems is, however, ushering in a mass of applications in which language models perform a small number of specialized tasks repetitively and with little variation. Here we lay out the position that small language models (SLMs) are sufficiently powerful, inherently more suitable, and necessarily more economical for many invocations in agentic systems, and are therefore the future of agentic AI. Our argumentation is grounded in the current level of capabilities exhibited by SLMs, the common architectures of agentic systems, and the economy of LM deployment. We further argue that in situations where general-purpose conversational abilities are essential, heterogeneous agentic systems (i.e., agents invoking multiple different models) are the natural choice. We discuss the potential barriers for the adoption of SLMs in agentic systems and outline a general LLM-to-SLM agent conversion algorithm. Our position, formulated as a value statement, highlights the significance of the operational and economic impact even a partial shift from LLMs to SLMs is to have on the AI agent industry. We aim to stimulate the discussion on the effective use of AI resources and hope to advance the efforts to lower the costs of AI of the present day. Calling for both contributions to and critique of our position, we commit to publishing all such correspondence at https://research.nvidia.com/labs/lpr/slm-agents.