arXiv:2610.21194v1 Announce Type: new Abstract: Existing federated data condensation methods face privacy risks, as uploaded synthetic data may preserve sensitive information and remain vulnerable to reconstruction attacks. Moreover, their generation often incurs considerable client-side computational overhead, limiting deployment on resource-constrained devices. To address these issues, we propose FedSumUp, which employs a learnable lossy compressor on clients to generate compact and visually interpretable representations. By controlling information capacity, FedSumUp reduces privacy leakage while allowing users to directly assess the privacy-utility tradeoff. We further introduce a dual-objective optimization mechanism to preserve task-relevant semantics while suppressing reconstruction risks. The compressor is trained on the server and only performs lightweight inference on clients. Since the server cannot access raw data, we develop a data-free closed-loop optimization strategy that optimizes the compressor by minimizing the discrepancy between original and twice-compressed representations after structure-preserving upsampling. Experiments on BloodMNIST, CIFAR-10, and ChestMNIST demonstrate reconstruction PSNR as low as 8.56 dB (with synthetic PSNR as low as 5.45 dB), client runtime reductions up to 96.5% (from 778s to 27s on ChestMNIST), and competitive classification accuracy (89.72% ChestMNIST, 82.24% BloodMNIST, 65.63% CIFAR-10), while remaining inherently robust to non-IID data distributions.