11 August 2025

Chain-of-thought AI “degrades significantly” when asked to generalize beyond training.
In recent months, the AI industry has started moving toward so-called simulated reasoning models that use a "chain of thought" process to work through tricky problems in multiple logical steps. At the same time, recent research has cast doubt on whether those models have even a basic understanding of general logical concepts or an accurate grasp of their own "thought process." Similar research shows that these "reasoning" models can often produce incoherent, logically unsound answers when questions include irrelevant clauses or deviate even slightly from common templates found in their training data.
In a recent pre-print paper, researchers from the Arizona State University summarize this existing work as "suggest[ing] that LLMs are not principled reasoners but rather sophisticated simulators of reasoning-like text." To pull on that thread, the researchers created a carefully controlled LLM environment in an attempt to measure just how well chain-of-thought reasoning works when presented with "out of domain" logical problems that don't match the specific logical patterns found in their training data.
The results suggest that the seemingly large performance leaps made by chain-of-thought models are "largely a brittle mirage" that "become[s] fragile and prone to failure even under moderate distribution shifts," the researchers write. "Rather than demonstrating a true understanding of text, CoT reasoning under task transformations appears to reflect a replication of patterns learned during training."
To test an LLM's generalized reasoning capability in an objective, measurable way, the researchers created a specially controlled LLM training environment called DataAlchemy. This setup creates small models trained on examples of two extremely simple text transformations—an ROT cypher and cyclical shifts—followed by additional training that demonstrates those two functions performed in various orders and combinations.

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