Engineering

When and How to Fine-Tune LLMs

Fine-tuning is rarely the answer. Here's the decision tree for your use case.

6 min read2026-01-15

The fine-tuning trap

Teams assume fine-tuning solves hallucination, cost, or latency—it doesn't address root causes.

Fine-tuning is expensive, slow to iterate, and hard to roll back.

Decision tree

Domain knowledge? Use RAG + prompt engineering first.

Cost reduction? Optimize token usage, use smaller models, or batch requests.

Style consistency? Few-shot examples in the prompt is often enough.

When to fine-tune

Fine-tuning makes sense for format-specific tasks (classification, extraction) with 100+ labeled examples.

Use a small model (7B-13B), validate on holdout set, and monitor for distribution shift.

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