World models, also known as world simulators, are emerging as a promising development in AI. AI pioneer Fei-Fei Li's World Labs has raised $230 million for creating large world models, and DeepMind has hired Sora's creator to focus on similar technology. These models are inspired by the subconscious mental models humans use to understand the world, as described by researchers David Ha and Jürgen Schmidhuber. For instance, baseball batters predict the ball's path instinctively, relying on internal models rather than conscious planning. World models have gained popularity due to their potential in generative video applications. Current AI-generated videos often fall into the uncanny valley, but world models can improve this by grasping why objects behave as they do. They are trained on diverse data to develop internal representations of real-world dynamics.

As Alex Mashrabov of Higgsfield explains, a strong world model understands object behavior, eliminating tedious manual inputs. Beyond video generation, world models hold promise for advanced forecasting and planning, as suggested by Meta's AI chief Yann LeCun. For example, a world model could plan actions to clean a room using deeper reasoning rather than pattern recognition. Despite this potential, there are significant technical hurdles. World models require immense computing power and are prone to biases from training data. Furthermore, they face challenges like accurately simulating diverse scenarios. If these issues are resolved, world models could substantially bridge AI with real-world applications, enhancing virtual world creation, robotics, and AI decision-making. They could provide robots greater awareness of their environment, improving their capabilities to navigate and interact with the real world.