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Abstract
As on-device large language model (LLM) systems become increasingly
prevalent, federated fine-tuning enables advanced language understanding and
generation directly on edge devices; however, it also involves processing
sensitive, user-specific data, raising significant privacy concerns within the
federated learning framework. To address these challenges, we propose
DP-FedLoRA, a privacy-enhanced federated fine-tuning framework that integrates
LoRA-based adaptation with differential privacy in a communication-efficient
setting. Each client locally clips and perturbs its LoRA matrices using
Gaussian noise to satisfy ($\epsilon$, $\delta$)-differential privacy. We
further provide a theoretical analysis demonstrating the unbiased nature of the
updates and deriving bounds on the variance introduced by noise, offering
practical guidance for privacy-budget calibration. Experimental results across
mainstream benchmarks show that DP-FedLoRA delivers competitive performance
while offering strong privacy guarantees, paving the way for scalable and
privacy-preserving LLM deployment in on-device environments.