Thinking on the Fly: Test-Time Reasoning Enhancement via Latent Thought Policy Optimization (2510.04182v1)

Abstract: Recent advancements in LLMs have shifted from explicit Chain-of-Thought (CoT) reasoning to more efficient latent reasoning, where intermediate thoughts are represented as vectors rather than text. However, latent reasoning can be brittle on challenging, out-of-distribution tasks where robust reasoning is most critical. To overcome these limitations, we introduce Latent Thought Policy Optimization (LTPO), a parameter-free framework that enhances LLM reasoning entirely at test time, without requiring model parameter updates. LTPO treats intermediate latent "thought" vectors as dynamic parameters that are actively optimized for each problem instance. It employs an online policy gradient method guided by an intrinsic, confidence-based reward signal computed directly from the frozen LLM's own output distributions, eliminating the need for external supervision or expensive text generation during optimization. Extensive experiments on five reasoning benchmarks show that LTPO not only matches or surpasses strong baselines on standard tasks but also demonstrates remarkable robustness where others fail. Most notably, on highly challenging AIME benchmarks where existing latent reasoning baselines collapse to near-zero accuracy, LTPO delivers substantial improvements, showcasing a unique capability for complex reasoning.