Beyond Raw Context Transfer: Representation-based Federated Retrieval-Augmented Generation

Abstract

Retrieval-augmented generation (RAG) improves the factuality of large language models (LLMs) and vision-language models (VLMs) by grounding generation in external knowledge. However, most existing RAG frameworks assume a centralized retrieval corpus, which is often impractical in sensitive domains such as healthcare, where data are inherently distributed and raw content cannot be directly shared across institutions. Recent efforts on decentralized RAG primarily follow prompt-based paradigms that exchange raw, human-readable retrieved content, leading to substantial inference-time computational overhead and direct exposure of retrieved information. To address these limitations, we propose Representation-based Federated RAG (FedRepRAG), a decentralized RAG framework that keeps raw documents at their owning clients and exchanges only compact latent representations during cross-client retrieval. To integrate retrieved knowledge, we introduce a collaboratively trained projector that converts retrieval embeddings into generator-compatible representation tokens for a frozen LLM/VLM backbone. Experiments across decentralized visual question answering (VQA) and question answering (QA) benchmarks show that FedRepRAG consistently outperforms direct inference and local retrieval baselines while substantially reducing retrieval-context length and inference-time computational overhead compared with raw-context transfer. Further analyses confirm the importance of query-relevant retrieved representations and characterize the residual representation-level leakage associated with representation exchange. Overall, FedRepRAG provides an effective and efficient framework for federated RAG without transferring raw retrieved content.