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Revolutionizing Data Labeling with

Large Language Models: The Future
of Data Annotation
Oct 3, 2023

by Toloka Team

Data Labeling & ML

Manual Data Labeling: The Traditional Approach Automated Data Labeling: A Step Towards Effici

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In the rapidly evolving landscape of AI technologies, data labeling plays a vital

role in training machine learning models. Accurate and well-labeled data is the
foundation of model performance. Traditionally, manual data labeling has been
the go-to method, but it's progressively becoming outdated for modern
enterprises.

We'll further explore the evolution of data labeling, from manual to automated
data labeling, and finally, the superior form of automated data labeling with
Large Language Models (LLMs). We'll also delve into the concept of hybrid
labeling, which combines human assistance with LLMs for the most desirable
labeling result.

Manual Data Labeling: The Traditional Approach

Manual labeling, also known as human annotation, is a fundamental procedure

in data annotation and plays a crucial role in various machine learning projects
and AI applications. It involves human labelers or annotators reviewing and
assigning data labels or annotations to datasets based on specific criteria or
guidelines.

Manual labeling ensures the creation of high-quality labeled datasets, which

are the foundation of powerful machine learning models. Annotators can apply
domain expertise, contextual understanding, and common-sense reasoning to
manifold labeling tasks.

While this method offers a high level of precision, it is labor-intensive, time-

consuming, and expensive. Moreover, manual labeling is considered outdated
in the context of modern data labeling and machine learning applications for
modern enterprises.

Limitations of the manual labeling process

One of the primary drawbacks of the manual labeling is its restricted scalability.
With the exponential growth of data, many machine learning tasks require
enormous datasets for training, testing, and validation. Manually labeling such
vast amounts of data is lengthy and occasionally even impractical. Limited
scalability of manual labeling makes it unsuitable for the ever-growing datasets
required in AI applications today.

Moreover, hiring and training human annotators, along with the time required

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for them to label data accurately, can result in significant expenses for
organizations. This cost factor becomes a major deterrent, especially for
startups and smaller enterprises with limited budgets.

Manual labeling heavily depends on the availability of a skilled workforce.

Organizations need to invest in recruiting, training, and managing annotators,
which can be resource-intensive. However, labelers, no matter how
experienced they are, are susceptible to inconsistencies. Even with guidelines
and training, there can be discrepancies in how various labelers identify labels
in the same data, leading to issues in the quality and reliability of labeled
datasets.

Manual data labeling is time-intensive. It can take days, weeks, or even months
to annotate a large dataset, depending on its size and complexity. For
repetitive labeling tasks, manual labeling is not only inefficient but also
monotonous for annotators. This can lead to boredom and decreased
accuracy over time.

But still manual labeling is a critical component of data preparation in AI and

machine learning projects. It excels in handling complex, nuanced, and
context-dependent tasks, providing high-quality labeled datasets. However, it
usually takes a lot of time, can be resource-intensive, and is subject to limited
scalability and label variations.

Automated Data Labeling: A Step Towards Efficiency

As organizations sought to overcome the limitations of the manual labeling

process, they turned to automated data labeling solutions. These solutions
often leverage rule-based algorithms and predefined guidelines to label raw
data automatically. Auto-labeling is a capability commonly integrated into data
annotation tools, utilizing artificial intelligence to automatically enhance or
label a dataset.

With the rise of machine learning algorithms, automating the assignment of

labels to data with a high level of precision has become feasible. This process
entails training a model on high-quality training datasets and then employing
this model to label fresh, unlabeled data. Over time, the model refines its
accuracy through exposure to more data, eventually achieving levels of
precision comparable to manual labeling.

In contrast to manual labeling, automated data labeling relies on machine

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learning algorithms to label data points efficiently and accurately. These

algorithms can swiftly and precisely label extensive datasets, reducing the time
and expense associated with manual labeling. Moreover, automated data
labeling helps to mitigate the risk of human error and bias, yielding more
uniform and dependable data annotations.

Advantages of Automated Labeling

Automated labeling can significantly accelerate the labeling process,

especially for large datasets, making it an essential tool for tasks related to
natural language processing (NLP) or computer vision.

Speed and Efficiency. One of the primary advantages of automated labeling

is its speed. Automated systems can label large volumes of data at a fraction
of the time it would take human annotators. This efficiency is particularly
valuable in applications that require quick data processing.

Scalability. Automated data labeling is highly scalable. It can handle

substantial datasets without hiring and training a large team of annotators. This
scalability is essential in machine learning applications that require extensive
data for training.

Cost Savings. Automated labeling can significantly reduce the expenses

associated with data labeling. While developing and implementing automated
systems may require certain investments, the long-term savings can be
substantial, especially for organizations dealing with massive datasets.

Automated labeling can handle the processing of large datasets rapidly,

making it highly scalable and cost-effective for projects with extensive data
requirements. Nonetheless, automated data labeling comes with its own set of
hurdles. For instance, the precision of automated data labeling is highly
contingent on the qualitative characteristics of the training data and the
intricacies of labeling data tasks. Furthermore, certain data types may pose
challenges for automated labeling, such as images featuring ambiguous
backgrounds or jokes in the text.

Human oversight and manual review may still be necessary, especially for
nuanced or domain-specific labeling tasks, to ensure the highest level of
accuracy and reliability of labels. So, while automation brings efficiency and
consistency, it can still struggle with complex and nuanced labeling objectives,
often requiring a high degree of manual tuning to achieve acceptable accuracy.

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Labeling with LLMs: The Superior Form of Automation

Large Language Models are advanced AI models that have revolutionized data
labeling. They use huge amounts of data and elaborate algorithms to
understand, interpret, and create texts in human language. LLMs possess the
ability to understand context, language nuances, and even the specific
objectives of a labeling assignment. They are mostly built using deep learning
techniques, most notably neural networks, which allow them to process and
learn from substantial amounts of textual data.

Utilizing LLMs to automate data labeling brings fantastic speed and stable
quality to the process while simultaneously lowering labeling costs significantly.
This is a kind of superior form of automated data labeling.

Such advanced AI models, which are pre-trained on vast amounts of training

data, have the capability to understand and generate human-like text, making
them highly versatile tools for an extensive range of natural language
processing tasks. LLMs convert raw data into labeled data by leveraging their
NLP capabilities.

Labeling data with LLMs is possible at an incredible speed, far surpassing

manual data labeling process and traditional automated systems. This
accelerated pace is essential for organizations dealing with large and
expanding datasets.

Key advantages of automated data labeling with LLMs

• Speed and Scalability. LLMs can label vast amounts of data in a fraction of
the time it would take humans or traditional automated data labeling
systems.
• Cost-Efficiency. By automating labeling with LLMs, organizations can
reduce labor costs and increase their labeling capacity without
compromising on quality.
• Adaptability. LLMs can handle a wide range of data labeling tasks, from
simple classification to complex entity recognition, making them versatile
tools for automated data labeling.

Types of tasks performed by LLMs for automated data labeling

purposes

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LLMs can be utilized for automated labeling in various ways:

• Text Classification. LLMs can classify text documents into predefined

categories or assign labels. By fine-tuning these models on specific
datasets, data scientists can create text classifiers that can automatically
label text data with high accuracy;
• Named Entity Recognition (NER). LLMs can be fine-tuned for NER tasks to
identify and label entities such as names, dates, locations, and more in
unstructured text data;
• Sentiment Analysis. LLMs can determine the sentiment of a piece of text
(e.g., positive, negative, neutral), which is valuable for tasks like customer
reviews, social media sentiment analysis, and others;
• Text Generation. In some cases, LLMs can generate labels or summaries for
text data, simplifying the labeling process. For instance, you can use LLMs
to generate short product descriptions in an e-commerce dataset;
• Question Answering. LLMs can answer questions about text, making it
possible to automatically generate labels by asking questions about the
content of the data;
• Language Translation. LLMs can translate text between languages, which
can be useful for labeling multilingual datasets.

Integration of Large Language Models has expanded the capabilities of auto-

labeling, making it a valuable tool in modern workflows. By automating a
significant portion of the labeling process, LLMs enhance productivity in
labeling projects, allowing organizations to meet tighter deadlines and use
their resources more efficiently. This automation liberates human annotators
from mundane and repetitive work, allowing them to focus on more complex
and nuanced aspects of the task.

While Large Language Models offer numerous advantages in natural language

understanding and generation, they also come with their fair share of
challenges.

Challenges of data labeling with LLMs

• Data Biases. LLMs can inherit biases from the data they have been trained
on, potentially leading to biased labels;
• Limited to Text Data. LLMs are primarily designed for text data, so they may
not be as effective for labeling other types of data, such as images or video;
• Continuous Maintenance. LLMs require continuous monitoring and
maintenance to ensure that they provide accurate and up-to-date labels, as

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the model's performance may degrade over time;

• Overconfidence. LLMs can exhibit overconfidence in their predictions,
providing labels with high certainty even when they are incorrect.

In practice, addressing these challenges involves a hybrid approach that

combines the strengths of LLMs for automated data labeling with human
labelers for validation and correction. This balance helps leverage the
efficiency of LLMs while ensuring the accuracy and quality of labeled data,
particularly in complex or sensitive domains.

Hybrid Labeling: Combining Human Expertise with LLMs

Although LLMs offer unparalleled efficiency and quality in automated data

labeling, there are still scenarios where human expertise is essential. Hybrid
labeling is a powerful tool that combines the strengths of both humans and
LLMs.

Platforms like Toloka offer hybrid labeling solutions, allowing organizations to

make use of the precision of human data labeling alongside the speed and
efficiency of LLMs. In this approach, LLMs create pre-labeled data, and human
annotators review and refine the labels, ensuring accuracy and compliance
with specific requirements.

In this approach, the question of who should label raw data isn't always
straightforward. Toloka's approach is iterative. Data labeling isn't a one-time
task, it's a continuous process of improvement. This iterative approach helps
fine-tune LLMs and improves the overall quality of labeled data over time.

Here's how Toloka optimizes data labeling pipelines with LLMs:

1. LLM processes data and suggests labels for human annotators;

2. Qualified annotators step in to label edge cases and other instances that
require nuanced judgment. Their domain knowledge ensures accurate
labeling in complex scenarios;
3. Humans conduct selective evaluations of LLM-generated annotations. This
step helps identify and correct any discrepancies or errors in the initial
labels;
4. Expert annotators provide quality assurance and feedback. Their expertise
ensures that the labeled data meets the highest standards of accuracy and
relevance;
5. Toloka collaborates with domain experts who bring field-specific knowledge

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to the labeling process. This expertise is essential for tasks that require a
deep understanding of the subject.

Benefits of Hybrid Labeling

• High Precision. Human annotators can handle complex or ambiguous

cases, ensuring the highest level of accuracy;
• Scalability. LLMs provide the initial labeling, allowing organizations to
process large datasets quickly, while humans handle the final quality control;
• Flexibility. Organizations can customize the level of human involvement
based on the nature of the labeling task, and optimizing resources.

What is required for automated data labeling with LLMs to provide the
best performance possible?

LLMs demonstrate remarkable performance in various natural language

processing (NLP) tasks, often achieving or even surpassing human-level
performance. For example, they excel in tasks like language translation, text
summarization, sentiment analysis, and named entity recognition. However,
their performance depends on the specific task and the quality of guidance or
training they receive.

Guidance and Fine-Tuning

While LLMs offer speed and efficiency, they may not perform optimally
straightaway. To achieve high accuracy, LLMs often require guidance in the
form of fine-tuning. Fine-tuning involves training the model on a smaller, task-
specific dataset to adapt it to a particular domain or labeling task, improving its
performance. It is often necessary to ensure accurate automated data labeling
with LLMs. Without proper guidance, LLMs may not perform optimally, and
their outputs may be unreliable.

Human Oversight

LLMs can handle many tasks autonomously, but still human oversight is crucial.
Humans can review and correct LLM-generated labels. LLMs are powerful
language models, but they are not infallible. They can make errors, especially
when dealing with ambiguous or complex data. Human oversight helps catch
and correct these errors, ensuring the final labels are of high quality and
accuracy. Reviewers can verify the correctness of LLM-generated labels by

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comparing them to ground truth or existing labeled data, improving the overall
data quality.

Fine-tuning and human assistance are often used in tandem. Fine-tuning

prepares the LLM to be more task-specific and aligned with guidelines, while
human assistance provides the critical human oversight necessary to ensure
the quality, fairness, and accuracy of the labels generated by the LLM.

Why Auto Data Labeling with LLMs Needs Human Guidance

Labeling with Large Language Models is a powerful and efficient approach to

data labeling, but it's not always a completely standalone solution. Human
annotators can serve as a quality control mechanism by reviewing and
validating LLM-generated labels and catching any errors or inaccuracies.
There are several reasons why labeling with LLMs may benefit from human
assistance:

Handling Edge Cases

LLMs may struggle with rare or unusual cases that do not conform to standard
patterns. Such instances are called edge cases and they often deviate from
the norm and can be challenging to label accurately due to their uniqueness or
complexity. Edge cases are characterized by their low frequency or
unpredictability. LLMs may struggle to assign accurate labels to edge cases, as
they rely on statistical patterns and may lack specific knowledge about these
unique instances. Humans can handle edge cases effectively, preventing
mislabeling and ensuring comprehensive coverage of the data.

Ambiguity Handling

LLMs may encounter situations where data is ambiguous. Many words and
phrases have multiple meanings depending on the context. LLMs might select
a meaning that seems most probable based on statistical patterns, but
humans can infer the intended meaning more accurately by drawing on their
knowledge of the subject matter. Human annotators can help disambiguate
such cases, ensuring the correct label is applied.

Bias Mitigation

LLMs can inherit biases present in their training dataset, potentially leading to
biased labels. Human guidance is essential for recognizing and correcting

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biased or inappropriate labeling to ensure fairness and ethical considerations.

Forming diverse and inclusive annotation teams with a variety of perspectives
can contribute to reducing biases. Diverse teams are more likely to catch and
address biases effectively.

Ethical and Sensitive Content

LLMs may not always be equipped to handle content that is sensitive,

controversial, or ethically challenging. Human guidance ensures that the
labeling process adheres to contemporary ethical standards and sensitivity to
cultural shifts. Annotators can exercise judgment and make appropriate
decisions in such cases.

Adaptation to Specific Requirements

Some labeling tasks have unique requirements that LLMs may not fully
understand. Human annotators can tailor the labeling process to meet these
specific needs, ensuring the data is labeled according to the desired criteria. In
some projects, particularly those involving specialized domains or historical
references, human annotators with expertise in the subject matter are
invaluable. They can accurately label data based on their domain knowledge,
which LLMs may lack.

Evolution of Language and Context

Language is dynamic, and contextual nuances evolve over time. LLMs are
trained on vast datasets, and their pre-training data can quickly become
outdated as language trends and cultural contexts change. Human guidance is
essential to bridge these gaps and ensure that labels remain contextually
relevant. Feedback can be used to fine-tune LLMs over time, helping them
adapt to changing language trends and evolving contexts. This iterative
process of improvement through human guidance allows LLMs to remain
relevant.

Slang and informal language

LLMs can struggle with slang and informal language. This is because slang
often involves unconventional word usage, idiomatic expressions, or cultural
references that may not be well-represented in their training data. Oversight
and review are valuable in these cases, as at times only humans with
knowledge of the specific slang can correct and provide context to ensure
accurate labeling or understanding of the data. Additionally, domain-specific

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fine-tuning or training on specialized input data that includes slang can

improve an LLM's performance in handling such language variations.

LLMs are unquestionably powerful tools for automating data labeling, but
potential issues related to its use which stem from various edge cases,
informal or sensitive content, unique labeling requirements, ambiguous or
outdated pre-training data, and evolving language trends underline the
importance of human guidance. The combination of automation capabilities
and human oversight allows to find a balance between efficiency and quality,
ensuring that labels to data points are accurate, reliable, and up-to-date while
adhering to ethical standards.

Moreover, learning from edge cases, ambiguities, and other challenging

instances is essential for model improvement. Human feedback on how to
handle specific cases can be used to enhance LLMs and make them more
robust over time.

Conclusion

Data labeling is a crucial step in training machine learning models. While

labeling data manually has been a traditional method of annotation, it is
becoming increasingly outdated for modern enterprises due to its limitations in
scalability, cost-efficiency, accuracy, and speed. Automated approaches,
especially those incorporating Large Language Models, have emerged as
superior alternatives that address these shortcomings and pave the way for
more efficient and effective data labeling processes in the era of artificial
intelligence and machine learning.

LLMs bring speed, stability, and cost-efficiency to data labeling, making them
the future of automated data annotation. Hybrid labeling, combining human
expertise with LLMs, represents a pragmatic approach that leverages the
strengths of both to achieve the highest levels of precision and scalability.
Platforms like Toloka offer a seamless integration of LLMs and human
annotators, allowing organizations to unlock the full potential of data labeling.

Article written by: Toloka Team

Updated: Nov 7, 2023 |

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