# The next frontier of AI: how ‘world models’ are simulating reality and virtual spaces > Source: > Published: 2026-07-10 12:30:09+00:00 # The next frontier of AI: how ‘world models’ are simulating reality and virtual spaces Increasingly, AI systems are expected to predict how environments will respond to actions before they are taken [Minxiao Chang](/author/minxiao-chang)in Shenzhen Artificial intelligence has spent years learning to generate words, images and videos. Now, the industry’s attention is shifting towards “world models” – AI systems designed to simulate how the physical or digital world changes over time. While the term was originally associated with physics simulations and robotics, a growing number of Chinese companies are applying the concept more broadly. The technology remains in its infancy, with little consensus on what a world model should ultimately look like. [one of the most active testing grounds](https://www.scmp.com/tech/big-tech/article/3350062/chinas-edge-over-us-ai-world-models-abundant-data-faster-deployment-executive-says?module=inline&pgtype=article)for these competing approaches. Here’s what you need to know about the next frontier of AI. ### What is a world model – and why the sudden buzz? World models have quickly become one of AI’s hottest buzzwords, with big tech names jumping into the fray.