LLMs are good at predicting the next token. Basically you use them to predict what are the probabilities of the next tokens to be a, b, or c. And then use arithmetic coding to store which one matched. So the LLM is used during compression and decompression.
Yes LLMs are always lossy, unless their size / capacity is so huge they can memorize all their inputs. Even if LLMs were not resource-constrained, one would expect lossy compression due to batching and the math of the loss function. Training is such that it is always better for the model to accurately approximate the majority of texts than to approximate any single text with maximum accuracy.
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Aren't LLMs lossy? You could make them lossless by also encoding a diff of the predicted output vs the actual text.
Edit to soften a claim I didn't mean to make.
LLMs are good at predicting the next token. Basically you use them to predict what are the probabilities of the next tokens to be a, b, or c. And then use arithmetic coding to store which one matched. So the LLM is used during compression and decompression.
Yes LLMs are always lossy, unless their size / capacity is so huge they can memorize all their inputs. Even if LLMs were not resource-constrained, one would expect lossy compression due to batching and the math of the loss function. Training is such that it is always better for the model to accurately approximate the majority of texts than to approximate any single text with maximum accuracy.