FedShield-LLM: A Secure and Scalable Federated Fine-Tuned Large Language Model

Federated Learning (FL) offers a decentralized framework for training and fine-tuning Large Language Models (LLMs) by leveraging computational resources across organizations while keeping sensitive data on local devices. It addresses privacy and security concerns while navigating challenges associated with the substantial computational demands of LLMs, which can be prohibitive for small and medium-sized organizations. FL supports the development of task-specific LLMs for cross-silo applications through fine-tuning but remains vulnerable to inference attacks, such as membership inference and gradient inversion, which threaten data privacy. Prior studies have utilized Differential Privacy (DP) in LLM fine-tuning, which, despite being effective at preserving privacy, can degrade model performance. To overcome these challenges, we propose a novel method, FedShield-LLM, that uses pruning with Fully Homomorphic Encryption (FHE) for Low-Rank Adaptation (LoRA) parameters, enabling secure computations on encrypted model updates while mitigating the attack surface by deactivating less important LoRA parameters. Furthermore, optimized federated algorithms for cross-silo environments enhance scalability and efficiency. Parameter-efficient fine-tuning techniques like LoRA substantially reduce computational and communication overhead, making FL feasible for resource-constrained clients. Experimental results show that the proposed method outperforms existing methods while maintaining robust privacy protection, enabling organizations to collaboratively train secure and efficient LLMs. The code and data are available at, https://github.com/solidlabnetwork/fedshield-llm