Two movements meet: AI is getting production responsibilities, and production data is flowing through AI. Anthropic’s September report, malicious routers, training data provenance and model drift show what to verify before an AI reaches production.
Knowledge distillation is a large model teaching a small one, and it works almost exactly like school: soft labels instead of a bare answer key, pairing weeks instead of reports, and a tutor who marks your own attempt rather than a textbook of last year’s solutions. The limits map too, and the last one costs money when you size the hardware.
A frontier lab optimizes an absolute target and has to explore. A challenger optimizes a distance to the leader and can exploit. That is the whole cost asymmetry, and it shows up in GPU hours and in a bike race.
A small coding model mocked on r/LocalLLM is actually a clean case of execution-verified distillation. Here is how the method works, when distilling a frontier model into a cheap local one pays off, and the three things the hype leaves out.