Perplexity Cost Understates What Activation Quantisation Breaks

Anish Sathyanarayanan

Activation quantisation is usually evaluated with an aggregate metric, perplexity, averaged over every token a model predicts. We ask whether that average identifies which computations a quantiser damages. Perplexity turns out to be a reliable aggregate signal: across 12 models from four families and 780 within-model comparisons, the arm perplexity prefers also retains more induction and more retrieval in all but 2.1 and 4.0 percent of cases respectively. But where perplexity has risen by only a factor of 1.2 to 1.5, induction still keeps 0.959 of its intact accuracy while retrieval has already fallen to 0.554, a gap the aggregate number does not surface. This gap has structure, not just size: a matched Gaussian-noise control of the same per-channel magnitude leaves it largely intact, and randomising only the sign of the quantisation error, every magnitude held fixed, is nearly as harmless, so magnitude alone does not explain the damage. Quantising in a rotated basis, which changes coordinate alignment without changing error magnitude, restores induction from 0.001 to 0.980 at three average bits per token in a single-block intervention, though retrieval recovers less completely…