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World Models: The $100 Trillion AI Opportunity That Makes ChatGPT Look Like a Calculator
There's a shift happening in AI that most people aren't paying attention to yet, but it's about to change everything we know about technology and investing.
I've been digging into what comes after large language models like ChatGPT, and I stumbled across something called "World Models." You probably haven't heard much about them yet, but that's about to change in a big way.
Here's why this matters…
Nvidia CEO Jensen Huang thinks the market for World Models could be worth $100 trillion. Let that sink in for a moment. That's bigger than the entire global economy right now.
And Elon Musk's XAI is all in on this, calling it his Manhattan Project — his biggest project ever. Think about that. The guy just launched a 30-story rocket into space, and he's saying this is bigger than that.
So what exactly are World Models, and why should you care?
The Difference Between Book Smart and Street Smart AI
Current AI systems like ChatGPT are essentially book smart. They've read the entire internet, but they don't actually understand anything.
They're basically superpowered autocorrect tools that predict the next word based on patterns they've seen before.
When you type "the cat sat on the," it will predict "mat" or "car" based on context. But here's the thing — they don't know what a cat is, what a mat is, or whether the cat should wear a hat.
They lack common sense, or what the tech world now calls street smarts.
World Models are AI that doesn't just read about the world but experiences it. These systems can simultaneously simulate reality, test scenarios, understand cause and effect, and dream up different possibilities to test in the real world.
It's the difference between reading a book about how to ride a bike versus actually getting on the bike, falling over a few times, learning about gravity and scraped knees along the way.
Where the Smart Money Is Positioning
There are several ways to play this opportunity. Nvidia (NVDA) remains the obvious choice as the arms dealers in this AI war, building the GPUs and platforms that serve as the building blocks for creating these World Models.
Musk is targeting applications in humanoid robots, 3D environment design and AI-generated video games, promising a great AI-generated game potentially by the end of 2026.
Robotics companies and big tech players like Google parent Alphabet (GOOGL) and Meta (META) are also building their own models.
Look, I know some skeptics say building true World Models is decades or even centuries away, maybe even impossible. The requirements are massive in terms of data, computing power and real-world reach.
But Tesla's cars are already out there running instances of Grok and could very well be one of the test beds for this World Model.
The technology I studied in graduate classes years ago? The computers are finally fast enough to actually do it. This isn't some distant future anymore — it's happening now, and the market opportunity is staggering.
Whether this becomes the next $100 trillion market or not, one thing's certain: The companies building the infrastructure and applications for World Models are positioning themselves for something massive. And that's worth paying attention to.
Now be sure to join me live at 9:15 a.m. ET for “Morning Monster,” my market-open livestream on YouTube!
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