NTILC: Neural Tool Invocation via Learned Compression

Agentic tool-calling language models depend on large registries of callable APIs, functions, and local actions. Placing full tool specifications directly in the prompt incurs a cost that scales linearly with the size of the tool registry, rapidly consuming the context budget. As the registry grows, this leads to higher latency and degrades selection accuracy, particularly due to interference from irrelevant tools. We overcome these limitations by introducing NTILC, a neural tool selection and invocation framework that replaces in-context registry look-up with learned latent retrieval. NTILC maps both user intent and tool specifications into a shared embedding space, enabling tool selection via external retrieval rather than in-context lookup. The language model is conditioned only on the selected tool schema, allowing for precise, constrained argument generation. Central to our approach is a signature-aware composite objective, which augments semantic similarity with constraints derived from tool signatures (e.g., argument schema, type compatibility, and return types). By combining Circle Loss with a Functional Margin Loss, the model enforces separation between tools that are semantically similar but incompatible under their execution signatures. We evaluate NTILC on public tool-selection and function-calling datasets and report context token usage, retrieval accuracy, and selection latency metrics. Across these settings, NTILC reduces context window consumption by over 95% and inference latency by up to 74% compared to long-context ICT baselines.