# Structured Distillation for Personalized Agent Memory: 11x Token Reduction with Retrieval Preservation

arXiv: https://arxiv.org/abs/2603.13017 · HTML: https://mlsanity.com/paper/2603.13017/

## Key facts

- No citing papers in the map yet (data through 14 Oct 2026).
- Placed in Agent memory systems, one of 16 directions in LLM agents and tool use.
- Builds on 14 of its 30 references that are in the map.
- First posted on arXiv 13 Mar 2026.

## Placed in

- LLM agents and tool use / [Agent memory systems](https://mlsanity.com/agents/agent-memory-systems/)
- Efficient LLM inference and serving / [Efficient reasoning and agent inference](https://mlsanity.com/inference/efficient-reasoning-and-agent-inference/)

## Builds on (most cited first, 14 of 14)

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- [Qwen3 Technical Report](https://mlsanity.com/paper/2505.09388/) (2025)
- [Mistral 7B](https://mlsanity.com/paper/2310.06825/) (2023)
- [Billion-scale similarity search with GPUs](https://mlsanity.com/paper/1702.08734/) (2017)
- [Phi-3 Technical Report: A Highly Capable Language Model Locally on Your Phone](https://mlsanity.com/paper/2404.14219/) (2024)
- [MiniLM: Deep Self-Attention Distillation for Task-Agnostic Compression of Pre-Trained Transformers](https://mlsanity.com/paper/2002.10957/) (2020)
- [MemGPT: Towards LLMs as Operating Systems](https://mlsanity.com/paper/2310.08560/) (2023)
- [BEIR: A Heterogenous Benchmark for Zero-shot Evaluation of Information Retrieval Models](https://mlsanity.com/paper/2104.08663/) (2021)
- [Efficient and robust approximate nearest neighbor search using Hierarchical Navigable Small World graphs](https://mlsanity.com/paper/1603.09320/) (2016)
- [Yi: Open Foundation Models by 01.AI](https://mlsanity.com/paper/2403.04652/) (2024)
- [InternLM2 Technical Report](https://mlsanity.com/paper/2403.17297/) (2024)
- [LLMLingua: Compressing Prompts for Accelerated Inference of Large Language Models](https://mlsanity.com/paper/2310.05736/) (2023)
- [A Survey on Dialogue Summarization: Recent Advances and New Frontiers](https://mlsanity.com/paper/2107.03175/) (2021)

## Abstract (arXiv)

Long conversations with an AI agent create a simple problem for one user: the history is useful, but carrying it verbatim is expensive. We study personalized agent memory: one user's conversation history with an agent, distilled into a compact retrieval layer for later search. Each exchange is compressed into a compound object with four fields (exchange_core, specific_context, thematic room_assignments, and regex-extracted files_touched). The searchable distilled text averages 38 tokens per exchange. Applied to 4,182 conversations (14,340 exchanges) from 6 software engineering projects, the method reduces average exchange length from 371 to 38 tokens, yielding 11x compression. We evaluate whether personalized recall survives that compression using 201 recall-oriented queries, 107 configurations spanning 5 pure and 5 cross-layer search modes, and 5 LLM graders (214,519 consensus-graded query-result pairs). The best pure distilled configuration reaches 96% of the best verbatim MRR (0.717 vs 0.745). Results are mechanism-dependent. All 20 vector search configurations remain non-significant after Bonferroni correction, while all 20 BM25 configurations degrade significantly (effect sizes |d|=0.031-0.756). The best cross-layer setup slightly exceeds the best pure verbatim baseline (MRR 0.759). Structured distillation compresses single-user agent memory without uniformly sacrificing retrieval quality. At 1/11 the context cost, thousands of exchanges fit within a single prompt while the verbatim source remains available for drill-down. We release the implementation and analysis pipeline as open-source software.