From new startups to massive Chinese technology firms, there is an intense global race to develop 'world models.' These advanced AI systems aim to move beyond language processing to comprehend and learn from physical reality.

A wave of companies, from the start-up launched by artificial intelligence “godmother” Li Fei-Fei to the largest Chinese tech firms, are racing to introduce their latest approaches to world models – an emerging field aimed at extending AI beyond language processing to learning from and comprehending physical reality. Alibaba Group Holding on Thursday unveiled Happy Oyster, which it called an open-ended world model designed for real-time and “flowy” virtual world creation and interaction,...