World Models: The Promise and Limits of Simulating the Physical World

Recent advances in artificial intelligence have largely centered on large language models, but a new category called 'world models' is now attracting significant investment and research. Unlike language-focused AI, world models aim to simulate the physical world—or a useful approximation of it—enabling systems to understand and interact with real-world environments. While still in early stages, this approach represents a major shift in AI development, though its capabilities remain bounded by computational and conceptual limitations.