Failure Modes in LLM Systems: A System-Level Taxonomy for Reliable AI Applications
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Abstract (arXiv)
Large language models (LLMs) are being rapidly integrated into decision-support tools, automation workflows, and AI-enabled software systems. However, their behavior in production environments remains poorly understood, and their failure patterns differ fundamentally from those of traditional machine learning models. This paper presents a system-level taxonomy of fifteen hidden failure modes that arise in real-world LLM applications, including multi-step reasoning drift, latent inconsistency, context-boundary degradation, incorrect tool invocation, version drift, and cost-driven performance collapse. Using this taxonomy, we analyze the growing gap in evaluation and monitoring practices: existing benchmarks measure knowledge or reasoning but provide little insight into stability, reproducibility, drift, or workflow integration. We further examine the production challenges associated with deploying LLMs - including observability limitations, cost constraints, and update-induced regressions - and outline high-level design principles for building reliable, maintainable, and cost-aware LLM systems. Finally, we outline high-level design principles for building reliable, maintainable, and cost-aware LLM-based systems. By framing LLM reliability as a system-engineering problem rather than a purely model-centric one, this work provides an analytical foundation for future research on evaluation methodology, AI system robustness, and dependable LLM deployment.
Key facts. Cited by 9 papers in the map (data through 7 Oct 2026). Builds on 40 of its 60 references that are in the map. First posted on arXiv 25 Nov 2025.
Builds on
40 of 60 references.
References · 40
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- 2024Knowledge Conflicts for LLMs: A Surveycited by 274
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- 2025Why Language Models Hallucinatecited by 205
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- 2024Multi-Step Reasoning with Large Language Models, a Surveycited by 140
28 more
- 2023An Empirical Study of the Non-determinism of ChatGPT in Code Generationcited by 134
- 2024LLM Maybe LongLM: Self-Extend LLM Context Window Without Tuningcited by 133
- 2025Where LLM Agents Fail and How They can Learn From Failurescited by 118
- 2024The Good, The Bad, and The Greedy: Evaluation of LLMs Should Not Ignore Non-Determinismcited by 113
- 2023Unleashing the potential of prompt engineering for large language modelscited by 72
- 2024Risk Taxonomy, Mitigation, and Assessment Benchmarks of Large Language Model Systemscited by 63
- 2024Exploring LLM-based Agents for Root Cause Analysiscited by 60
- 2024Factual Confidence of LLMs: on Reliability and Robustness of Current Estimatorscited by 59
- 2025Large Language Models Hallucination: A Comprehensive Surveycited by 45
- 2023Two Failures of Self-Consistency in the Multi-Step Reasoning of LLMscited by 36
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- 2024A Survey of AIOps for Failure Management in the Era of Large Language Modelscited by 16
- 2025Understanding Multimodal LLMs Under Distribution Shifts: An Information-Theoretic Approachcited by 15
- 2025An overview of model uncertainty and variability in LLM-based sentiment analysis. Challenges, mitigation strategies and the role of explainabilitycited by 15
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Built on by
Citing papers per year: 2026: 9.
9 papers.
- 2026Model or Harness? An Interaction-Centric Taxonomy for Localizing Agent Failurescited by 6
- 2026Real Faults in Model Context Protocol (MCP) Software: a Comprehensive Taxonomycited by 5
- 2026Exploring Robust Multi-Agent Workflows for Environmental Data Managementcited by 0
- 2026Revealing Interpretable Failure Modes of VLMscited by 0
- 2026Why We Need World Models for AGI: Where LLMs Fail and How World Models May Outperformcited by 0
- 2026POIROT: Interrogating Agents for Failure Detection in Multi-Agent Systemscited by 0
- 2026AI Assurance in UK Defence: Challenges in Operationalising JSP 936cited by 0
- 2026FailureScope: Cross-Regime Behavioral Diagnosis of Language Model Weaknessescited by 0
- 2026StabilityBench: Benchmarking Instability in LLMscited by 0
- 2026Model or Harness? An Interaction-Centric Taxonomy for Localizing Agent Failures30 Jul 2026
- 2026StabilityBench: Benchmarking Instability in LLMs17 Jul 2026
- 2026AI Assurance in UK Defence: Challenges in Operationalising JSP 9368 Jun 2026
- 2026FailureScope: Cross-Regime Behavioral Diagnosis of Language Model Weaknesses3 Jun 2026
- 2026POIROT: Interrogating Agents for Failure Detection in Multi-Agent Systems1 Jun 2026
- 2026Why We Need World Models for AGI: Where LLMs Fail and How World Models May Outperform13 May 2026
- 2026Revealing Interpretable Failure Modes of VLMs12 May 2026
- 2026Exploring Robust Multi-Agent Workflows for Environmental Data Management2 Apr 2026
- 2026Real Faults in Model Context Protocol (MCP) Software: a Comprehensive Taxonomy5 Mar 2026
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- 2026AgentFixer: From Failure Detection to Fix Recommendations in LLM Agentic Systems
- 2025How Do LLMs Fail In Agentic Scenarios? A Qualitative Analysis of Success and Failure Scenarios of Various LLMs in Agentic Simulations
- 2025Challenges in Testing Large Language Model Based Software: A Faceted Taxonomy
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- 2026When Agents Fail to Act: A Diagnostic Framework for Tool Invocation Reliability in Multi-Agent LLM Systems
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