FedEx-LoRA: Exact Aggregation for Federated Parameter-Efficient Fine-Tuning of Foundation Models

Low-Rank Adaptation (LoRA) is a popular technique for efficient fine-tuning of foundation models. However, applying LoRA in federated learning environments, where data is distributed across multiple clients, presents unique challenges. Existing methods rely on traditional federated averaging of LoRA adapters, resulting in noisy and inexact updates. To address this, we propose Federated Exact LoRA, or FedEx-LoRA, that adds a residual error term to the pretrained frozen weight matrix. Our approach achieves exact updates with minimal computational and communication overhead, preserving LoRA’s efficiency. We evaluate the method on various Natural Language Understanding (NLU) and Natural Language Generation (NLG) tasks, showing consistent performance gains over state-of-the-art methods across multiple settings. Through extensive analysis, we quantify that the deviations in updates from the ideal solution are significant, highlighting the need for exact aggregation. Our method's simplicity, efficiency, and broad applicability position it as a promising solution for accurate and effective federated fine-tuning of foundation models.