Yufan Lu

Ailin Huang, Ang Li, Aobo Kong et al.

We introduce Step 3.5 Flash, a sparse Mixture-of-Experts (MoE) model that bridges frontier-level agentic intelligence and computational efficiency. We focus on what matters most when building agents: sharp reasoning and fast, reliable execution. Step 3.5 Flash pairs a 196B-parameter foundation with 11B active parameters for efficient inference. It is optimized with interleaved 3:1 sliding-window/full attention and Multi-Token Prediction (MTP-3) to reduce the latency and cost of multi-round agentic interactions. To reach frontier-level intelligence, we design a scalable reinforcement learning framework that combines verifiable signals with preference feedback, while remaining stable under large-scale off-policy training, enabling consistent self-improvement across mathematics, code, and tool use. Step 3.5 Flash demonstrates strong performance across agent, coding, and math tasks, achieving 85.4% on IMO-AnswerBench, 86.4% on LiveCodeBench-v6 (2024.08-2025.05), 88.2% on tau2-Bench, 69.0% on BrowseComp (with context management), and 51.0% on Terminal-Bench 2.0, comparable to frontier models such as GPT-5.2 xHigh and Gemini 3.0 Pro. By redefining the efficiency frontier, Step 3.5 Flash provides a high-density foundation for deploying sophisticated agents in real-world industrial environments.

Boyong Wu, Chao Yan, Chen Hu et al.

This paper presents Step-Audio 2, an end-to-end multi-modal large language model designed for industry-strength audio understanding and speech conversation. By integrating a latent audio encoder and reasoning-centric reinforcement learning (RL), Step-Audio 2 achieves promising performance in automatic speech recognition (ASR) and audio understanding. To facilitate genuine end-to-end speech conversation, Step-Audio 2 incorporates the generation of discrete audio tokens into language modeling, significantly enhancing its responsiveness to paralinguistic information such as speaking styles and emotions. To effectively leverage the rich textual and acoustic knowledge in real-world data, Step-Audio 2 integrates retrieval-augmented generation (RAG) and is able to call external tools such as web search to mitigate hallucination and audio search to switch timbres. Trained on millions of hours of speech and audio data, Step-Audio 2 delivers intelligence and expressiveness across diverse conversational scenarios. Evaluation results demonstrate that Step-Audio 2 achieves state-of-the-art performance on various audio understanding and conversational benchmarks compared to other open-source and commercial solutions. Please visit https://github.com/stepfun-ai/Step-Audio2 for more information.

StepFun, Bin Wang, Bojun Wang et al.

Large language models (LLMs) face low hardware efficiency during decoding, especially for long-context reasoning tasks. This paper introduces Step-3, a 321B-parameter VLM with hardware-aware model-system co-design optimized for minimizing decoding costs. Step-3 innovates in two key dimensions: (1) A novel Multi-Matrix Factorization Attention (MFA) mechanism that significantly reduces both KV cache size and computation while maintaining high attention expressiveness, and (2) Attention-FFN Disaggregation (AFD), a distributed inference system that decouples attention and Feed-Forward Network (FFN) layers into specialized subsystems. This co-design achieves unprecedented cost efficiency: Step-3 significantly reduces theoretical decoding costs compared with models like DeepSeek-V3 and Qwen3 MoE 235B, with the gains widening at longer context. Step-3 achieves low cost while activating 38B parameters per token (more than DeepSeek-V3 and Qwen3 MoE 235B), demonstrating that hardware-aligned attention arithmetic intensity, MoE sparsity, and AFD are critical to cost-effectiveness. We perform a head-to-head comparison with DeepSeek-V3 in its favorable scenarios. Our implementation on Hopper GPUs achieves a decoding throughput of up to 4,039 tokens per second per GPU under 50ms TPOT SLA (4K context, FP8, no MTP). It is higher than DeepSeek-V3's 2,324 in the same setup and sets a new Pareto frontier for LLM decoding.

Xiaowei Chen, Hong Li, Yufan Lu et al.

This paper explores the implications of using machine learning models in the pricing of catastrophe (CAT) bonds. By integrating advanced machine learning techniques, our approach uncovers nonlinear relationships and complex interactions between key risk factors and CAT bond spreads -- dynamics that are often overlooked by traditional linear regression models. Using primary market CAT bond transaction records between January 1999 and March 2021, our findings demonstrate that machine learning models not only enhance the accuracy of CAT bond pricing but also provide a deeper understanding of how various risk factors interact and influence bond prices in a nonlinear way. These findings suggest that investors and issuers can benefit from incorporating machine learning to better capture the intricate interplay between risk factors when pricing CAT bonds. The results also highlight the potential for machine learning models to refine our understanding of asset pricing in markets characterized by complex risk structures.