# Where Does Reasoning Break? Step-Level Hallucination Detection via Hidden-State Transport Geometry

arXiv: https://arxiv.org/abs/2605.13772 · HTML: https://mlsanity.com/paper/2605.13772/

## Key facts

- Cited by 2 papers in the map (data through 14 Oct 2026).
- Placed in Hallucination detection and mitigation, one of 17 directions in LLM reasoning.
- Builds on 20 of its 27 references that are in the map.
- First posted on arXiv 13 May 2026.

## Placed in

- LLM reasoning / [Hallucination detection and mitigation](https://mlsanity.com/lr/hallucination-detection-and-mitigation/)

## Builds on (most cited first, 20 of 20)

- [Chain-of-Thought Prompting Elicits Reasoning in Large Language Models](https://mlsanity.com/paper/2201.11903/) (2022)
- [Distilling the Knowledge in a Neural Network](https://mlsanity.com/paper/1503.02531/) (2015)
- [Training Verifiers to Solve Math Word Problems](https://mlsanity.com/paper/2110.14168/) (2021)
- [Self-Consistency Improves Chain of Thought Reasoning in Language Models](https://mlsanity.com/paper/2203.11171/) (2022)
- [Dropout as a Bayesian Approximation: Representing Model Uncertainty in Deep Learning](https://mlsanity.com/paper/1506.02142/) (2015)
- [Let's Verify Step by Step](https://mlsanity.com/paper/2305.20050/) (2023)
- [Locating and Editing Factual Associations in GPT](https://mlsanity.com/paper/2202.05262/) (2022)
- [Survey of Hallucination in Natural Language Generation](https://mlsanity.com/paper/2202.03629/) (2022)
- [Language Models (Mostly) Know What They Know](https://mlsanity.com/paper/2207.05221/) (2022)
- [A Survey on Hallucination in Large Language Models: Principles, Taxonomy, Challenges, and Open Questions](https://mlsanity.com/paper/2311.05232/) (2023)
- [Representation Engineering: A Top-Down Approach to AI Transparency](https://mlsanity.com/paper/2310.01405/) (2023)
- [Math-Shepherd: Verify and Reinforce LLMs Step-by-step without Human Annotations](https://mlsanity.com/paper/2312.08935/) (2023)
- [Semantic Uncertainty: Linguistic Invariances for Uncertainty Estimation in Natural Language Generation](https://mlsanity.com/paper/2302.09664/) (2023)
- [Discovering Latent Knowledge in Language Models Without Supervision](https://mlsanity.com/paper/2212.03827/) (2022)
- [The Internal State of an LLM Knows When It's Lying](https://mlsanity.com/paper/2304.13734/) (2023)
- [INSIDE: LLMs' Internal States Retain the Power of Hallucination Detection](https://mlsanity.com/paper/2402.03744/) (2024)
- [ProcessBench: Identifying Process Errors in Mathematical Reasoning](https://mlsanity.com/paper/2412.06559/) (2024)
- [LLMs-augmented Contextual Bandit](https://mlsanity.com/paper/2311.02268/) (2023)
- [Logic-Guided Vector Fields for Constrained Generative Modeling](https://mlsanity.com/paper/2602.02009/) (2026)
- [Geometry-Aware Uncertainty Quantification via Conformal Prediction on Manifolds](https://mlsanity.com/paper/2602.16015/) (2026)

## Built on by (most cited first, 2 of 2)

- [Quickest Detection of Hallucination Onset: Delay Bounds and Learned CUSUM Statistics](https://mlsanity.com/paper/2606.12476/) (2026)
- [Uncertainty Quantification for LLM Agents: A Taxonomy, an Evaluation Protocol, and an Empirical Study](https://mlsanity.com/paper/2609.07395/) (2026)

## Abstract (arXiv)

Large language models hallucinate during multi-step reasoning, but most existing detectors operate at the trace level: they assign one confidence score to a full output, fail to localize the first error, and often require multiple sampled completions. We frame hallucination instead as a property of the hidden-state trajectory produced during a single forward pass. Correct reasoning moves through a stable manifold of locally coherent transitions; a first error appears as a localized excursion in transport cost away from this manifold. We operationalize this view with a label-conditioned teacher that builds a trace-specific contrastive PCA lens and scores each step with seven geometric transition features, and a deployable BiLSTM student distilled from the teacher that operates on raw hidden states without inference-time labels. We prove that contrastive PCA is the optimal projection for a transport-separation objective between first error and correct states, and that single-pass first error localization holds whenever the first error creates a positive transport margin over preceding correct transitions. On ProcessBench, PRM800K, HaluEval, and TruthfulQA, both models outperform entropy-based, probing-based, and attention-based baselines in-domain; the teacher transfers stably across language models and datasets, while the student collapses under shift, a gap our distillation theory predicts. These results recast step-level hallucination detection as a problem of trajectory dynamics and identify the central obstacle to deployment: preserving the contrastive transport margin under distribution shift.