Creating rich, interactive 3D worlds is currently so expensive it's reserved for AAA games with mass appeal. Generative spatial AI dramatically reduces this cost, paving the way for hyper-personalized 3D media for niche applications—like education or training—that were previously economically unviable.

GI discovered their world model, trained on game footage, could generate a realistic camera shake during an in-game explosion—a physical effect not part of the game's engine. This suggests the models are learning an implicit understanding of real-world physics and can generate plausible phenomena that go beyond their source material.

Game artists use scanning (photogrammetry) to create ultra-realistic assets. By taking thousands of photos of a real tree from every angle, they generate a 3D model that is a direct digital copy, effectively making the in-game object a "digital ghost" of a real one.

Large language models are insufficient for tasks requiring real-world interaction and spatial understanding, like robotics or disaster response. World models provide this missing piece by generating interactive, reason-able 3D environments. They represent a foundational shift from language-based AI to a more holistic, spatially intelligent AI.

Using large language models, companies can create 'digital twins' of team members based on their work patterns. This allows managers to run 'what-if' scenarios—testing different team compositions or workflows in a simulation to predict outcomes and flag potential issues before making real-world changes.

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.

A niche, services-heavy market has emerged where startups build bespoke, high-fidelity simulation environments for large AI labs. These deals command at least seven-figure price tags and are critical for training next-generation agentic models, despite the customer base being only a few major labs.

Instead of replacing entire systems with AI "world models," a superior approach is a hybrid model. Classical code should handle deterministic logic (like game physics), while AI provides a "differentiable" emergent layer for aesthetics and creativity (like real-time texturing). This leverages the unique strengths of both computational paradigms.

Instead of manually designing every detail, games like Minecraft use algorithms (procedural generation) to build vast worlds. This technique, similar to natural laws, allows for emergent complexity and unique landscapes that can surprise even the game's creators, fostering a sense of discovery.