A fascinating meta-learning loop emerged where an LLM provides real-time 'quality checks' to human subject-matter experts. This helps them learn the novel skill of how to effectively teach and 'stump' another AI, bridging the gap between their domain expertise and the mechanics of model training.

While language models understand the world through text, Demis Hassabis argues they lack an intuitive grasp of physics and spatial dynamics. He sees 'world models'—simulations that understand cause and effect in the physical world—as the critical technology needed to advance AI from digital tasks to effective robotics.

The path to a general-purpose AI model is not to tackle the entire problem at once. A more effective strategy is to start with a highly constrained domain, like generating only Minecraft videos. Once the model works reliably in that narrow distribution, incrementally expand the training data and complexity, using each step as a foundation for the next.

Startups and major labs are focusing on "world models," which simulate physical reality, cause, and effect. This is seen as the necessary step beyond text-based LLMs to create agents that can truly understand and interact with the physical world, a key step towards AGI.

Pre-training on internet text data is hitting a wall. The next major advancements will come from reinforcement learning (RL), where models learn by interacting with simulated environments (like games or fake e-commerce sites). This post-training phase is in its infancy but will soon consume the majority of compute.

Training AI agents to execute multi-step business workflows demands a new data paradigm. Companies create reinforcement learning (RL) environments—mini world models of business processes—where agents learn by attempting tasks, a more advanced method than simple prompt-completion training (SFT/RLHF).

Beyond supervised fine-tuning (SFT) and human feedback (RLHF), reinforcement learning (RL) in simulated environments is the next evolution. These "playgrounds" teach models to handle messy, multi-step, real-world tasks where current models often fail catastrophically.

Companies like OpenAI and Anthropic are spending billions creating simulated enterprise apps (RL gyms) where human experts train AI models on complex tasks. This has created a new, rapidly growing "AI trainer" job category, but its ultimate purpose is to automate those same expert roles.

The AI's ability to handle novel situations isn't just an emergent property of scale. Waive actively trains "world models," which are internal generative simulators. This enables the AI to reason about what might happen next, leading to sophisticated behaviors like nudging into intersections or slowing in fog.