This was a common argument against LLMs, that the space of possible next tokens is so vast that eventually a long enough sequence will necessarily decay into nonsense, or at least that compounding error will have the same effect.

Problem is, that's not what we've observed to happen as these models get better. In reality there is some metaphysical coarse-grained substrate of physics/semantics/whatever[1] which these models can apparently construct for themselves in pursuit of ~whatever~ goal they're after.

The initially stated position, and your position: "trying to hallucinate an entire world is a dead-end", is a sort of maximally-pessimistic 'the universe is maximally-irreducible' claim.

The truth is much much more complicated.

[1] https://www.arxiv.org/abs/2512.03750

And going back a little further, it was thought that backpropagation would be impractical, and trying to train neural networks was a dead end. Then people tried it and it worked just fine.

> Problem is, that's not what we've observed to happen as these models get better

Eh? Context rot is extremely well known. The longer you let the context grow, the worse LLMs perform. Many coding agents will pre-emptively compact the context or force you to start a new session altogether because of this. For Genie to create a consistent world, it needs to maintain context of everything, forever. No matter how good it gets, there will always be a limit. This is not a problem if you use a game engine and code it up instead.