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Q49HardConcept

When would you fine-tune a model for agentic behaviour instead of improving prompts and tools?

30-second answerSay your answer out loud first, then reveal.

Order of operations

  1. Better prompts, examples and tool descriptions.
  2. Better tools / fewer steps.
  3. Better context (retrieval, memory).
  4. A stronger base model.
  5. Then fine-tuning, if the economics and data justify it.

Good reasons to fine-tune

  • Cost/latency: distil a large model's successful trajectories into a smaller model for a high-volume, narrow agent (e.g. ticket triage with 8 tools).
  • Consistent domain behaviour: a specific tool-calling style, domain jargon, output formats that prompting can't hold reliably.
  • Verifiable tasks + RL: where success can be checked automatically (tests pass, SQL returns the correct result), reinforcement fine-tuning can improve multi-step tool use.

Costs and risks

  • Needs curated data (successful trajectories plus failures) and a robust eval suite.
  • Lock-in: tool or schema changes may require retraining; new base models need re-tuning.
  • Can lose general capabilities, or overfit to the training distribution.
  • Ongoing MLOps: versioning, monitoring and retraining pipelines.
Interview framing: "I'd fine-tune only with an eval showing a clear gap that prompting and tooling couldn't close, plus enough volume to justify the operational cost."

This is what real progress feels like.