# Improving Latent Generalization Using Test-time Compute

arXiv: https://arxiv.org/abs/2604.01430 · HTML: https://mlsanity.com/paper/2604.01430/

## Key facts

- No citing papers in the map yet (data through 14 Oct 2026).
- Placed in Test-time compute and efficient thinking, one of 17 directions in LLM reasoning.
- Builds on 20 of its 29 references that are in the map.
- First posted on arXiv 1 Apr 2026.

## 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, 20 of 20)

- [DeepSeek-R1: Incentivizing Reasoning Capability in LLMs via Reinforcement Learning](https://mlsanity.com/paper/2501.12948/) (2025)
- [Gemini 2.5: Pushing the Frontier with Advanced Reasoning, Multimodality, Long Context, and Next Generation Agentic Capabilities](https://mlsanity.com/paper/2507.06261/) (2025)
- [Let's Verify Step by Step](https://mlsanity.com/paper/2305.20050/) (2023)
- [OpenAI o1 System Card](https://mlsanity.com/paper/2412.16720/) (2024)
- [Towards Reasoning Era: A Survey of Long Chain-of-Thought for Reasoning Large Language Models](https://mlsanity.com/paper/2503.09567/) (2025)
- [Measuring short-form factuality in large language models](https://mlsanity.com/paper/2411.04368/) (2024)
- [Physics of Language Models: Part 3.1, Knowledge Storage and Extraction](https://mlsanity.com/paper/2309.14316/) (2023)
- [Taken out of context: On measuring situational awareness in LLMs](https://mlsanity.com/paper/2309.00667/) (2023)
- [Physics of Language Models: Part 3.2, Knowledge Manipulation](https://mlsanity.com/paper/2309.14402/) (2023)
- [Recitation-Augmented Language Models](https://mlsanity.com/paper/2210.01296/) (2022)
- [Synthetic continued pretraining](https://mlsanity.com/paper/2409.07431/) (2024)
- [Reverse Training to Nurse the Reversal Curse](https://mlsanity.com/paper/2403.13799/) (2024)
- [On the generalization of language models from in-context learning and finetuning: a controlled study](https://mlsanity.com/paper/2505.00661/) (2025)
- [Learning to Reason for Factuality](https://mlsanity.com/paper/2508.05618/) (2025)
- [Text Data Augmentation for Large Language Models: A Comprehensive Survey of Methods, Challenges, and Opportunities](https://mlsanity.com/paper/2501.18845/) (2025)
- [Thinking to Recall: How Reasoning Unlocks Parametric Knowledge in LLMs](https://mlsanity.com/paper/2603.09906/) (2026)
- [Latent learning: episodic memory complements parametric learning by enabling flexible reuse of experiences](https://mlsanity.com/paper/2509.16189/) (2025)
- [Tell, don't show: Declarative facts influence how LLMs generalize](https://mlsanity.com/paper/2312.07779/) (2023)
- [Improving Parametric Knowledge Access in Reasoning Language Models](https://mlsanity.com/paper/2602.22193/) (2026)
- [textitNew News: System-2 Fine-tuning for Robust Integration of New Knowledge](https://mlsanity.com/paper/2505.01812/) (2025)

## Abstract (arXiv)

Language Models (LMs) exhibit two distinct mechanisms for knowledge acquisition: in-weights learning (i.e., encoding information within the model weights) and in-context learning (ICL). Although these two modes offer complementary strengths, in-weights learning frequently struggles to facilitate deductive reasoning over the internalized knowledge. We characterize this limitation as a deficit in latent generalization, of which the reversal curse is one example. Conversely, in-context learning demonstrates highly robust latent generalization capabilities. To improve latent generalization from in-weights knowledge, prior approaches rely on train-time data augmentation, yet these techniques are task-specific, scale poorly, and fail to generalize to out-of-distribution knowledge. To overcome these shortcomings, this work studies how models can be taught to use test-time compute, or 'thinking', specifically to improve latent generalization. We use Reinforcement Learning (RL) from correctness feedback to train models to produce long chains-of-thought (CoTs) to improve latent generalization. Our experiments show that this thinking approach not only resolves many instances of latent generalization failures on in-distribution knowledge but also, unlike augmentation baselines, generalizes to new knowledge for which no RL was performed. Nevertheless, on pure reversal tasks, we find that thinking does not unlock direct knowledge inversion, but the generate-and-verify ability of thinking models enables them to get well above chance performance. The brittleness of factual self-verification means thinking models still remain well below the performance of in-context learning for this task. Overall, our results establish test-time thinking as a flexible and promising direction for improving the latent generalization of LMs.