GR2 Technical Report

Yufei Li, Zaiwei Zhang, Mingfu Liang, Kavosh Asadi, Jay Xu, Jimmy Kim, Chongyang Bai, Jieyi Zhang, Hongye Xie, Prachi Agrawal, Dian Yu, Tianyi Chen, Jean-Pascal Billaud, Garret Buell, Yongkang Zhu, Sachin Patil, Brooke Bian, Zhou Fang, Kevin Huang, Shiva Sudanagunta, Yuzhen Huang, Emma Lu, Chris O'Brien, Yang Song, Lihong Li, Jacob Tao, Zhicheng Zhu, Chao Li, Gaoxiang Liu, Neil Wu, Zhongyin Hu, Li Han, Loki Chen, Ming Lei, Greg Rehm, Siyuan Song, Tianwei Zhang, Li Li, Ketan Singh, Yavuz Yetim, Ilyas Atishev, Satendra Gera, Ashkan Sadeghi, Rachel Yan, Nikko Mizutani, Shuaiwen Wang, Song Yang, Zhijing Li, Jiang Liu, Mengying Sun, Fei Tian, Xiaohan Wei, Chonglin Sun, Shuo Gu, Parish Aggarwal, Senthil Manickavelu, Kaushik Rangadurai, Zhi Hua, Frank Shyu, Ruchit Sharma, Liyuan Li, Shike Mei, Wenlin Chen, Santanu Kolay, Ben Schulte, Deepak Chandra, Yang Song, Sandeep Pandey, Xi Liu, Hamed Firooz, Luke Simon

Industrial recommendation systems serve billions of users through a multi-stage funnel -- retrieval, early-stage ranking, and re-ranking -- where the final re-ranking step disproportionately shapes user engagement and downstream performance, particularly for carousel and grid display formats. Despite growing enthusiasm for Large Language Models (LLMs) in recommendation, three gaps hinder industrial adoption: (1) most efforts target retrieval and ranking, leaving re-ranking -- the stage closest to the final user experience -- largely underexplored; (2) LLMs are typically deployed zero-shot or via supervised fine-tuning, underutilizing the reasoning capabilities unlocked by reinforcement learning (RL) on verifiable rewards; (3) deployed catalogs index billions of items with non-semantic identifiers that lie outside any base-LLM vocabulary. We present GR2 (Generative Reasoning Re-Ranker), an end-to-end framework that combines (i) mid-training on semantic IDs produced by a tokenizer with >=99% uniqueness, (ii) reasoning-trace distilled from a stronger teacher via targeted prompting and rejection sampling, and (iii) RL with verifiable rewards purpose-built for re-ranking. To make GR2 resource-viable, we further (iv) introduce a context compressor that amortizes training cost, On-Policy Distillation (OPD) as a scalable alternative to SFT -- which we find collapses at industrial scale -- and reasoning distillation for low-latency serving. GR2 delivers +18.7% R@1, +7.1% R@3, and +9.6% N@3 over legacy baselines on industrial-scale traffic. We further find that reward design is critical in re-ranking: LLMs often hack rewards by preserving the incoming order or exploiting position bias, motivating conditional verifiable rewards as essential industrial components.