An "outlier" is a hidden state value greater than a certain threshold, and these values are computed in fp16. While the values are usually normally distributed ([-3.5, 3.5]), this distribution can be very different for large models ([-60, 6] or [6, 60]). 8-bit quantization works well for values ~5, but beyond that, there is a significant performance penalty. A good default threshold value is 6, but a lower threshold may be needed for more unstable models (small models or finetuning).