Earlier quoted context omitted.
This is a preprint that was just uploaded to arxiv two days ago. Don't be hasty and assume that it settles any matter at all. Many such claims have been made before and many counter-claims also. There is still a lively debate on the subject and it will be some time before there is agreement. More generally, any scholarly article is a claim, and should never be read as automatically true. That's something to keep in m…
I thought it was completely obvious that if it can predict things about the world as well as it can it has some form of world model, even if inaccurate. I’m surprised that anyone would argue that a language model doesn’t model things
Briefly, a "world model" is a theory possessed by an autonomous agent that describes the entities that exist in the world and how they interact with each other and with the agent, and that the agent can use to make decisions. This is the sense in which "model" is used when people talk about "model based" approaches to AI (such as planning, for instance, which is "the model based approach to autonomous behaviour").
A "language model" on the other hand is a statistical model of the text in a corpus. A statistical model is really a set of events, and their probabilities. The "events" in a statistical language model are usually word collocations, where a collocation is a word A found near a word B, for some measure of "near". If you've heard about "word embeddings", that's a model of word collocations in text corpora.
So the claim that LLMs "have a model" is about LLMs being autonomous agents with a world-model, while "Large Language Model" is about statistical modelling. There's no reason why a statistical language model should have a world model.