Phrases like "actual understanding", "true intelligence" etc. are not conducive to productive discussion unless you take the trouble to define what you mean by them (which ~nobody ever does). They're highly ambiguous and it's never clear what specific claims they do or don't imply when used by any given person.

But I think this specific claim is clearly wrong, if taken at face value:

> They just regurgitate text compressed in their memory

They're clearly capable of producing novel utterances, so they can't just be doing that. (Unless we're dealing with a very loose definition of "regurgitate", in which case it's probably best to use a different word if we want to understand each other.)

The fact that the outputs are probabilities is not important. What is important is how that output is computed.

You could imagine that it is possible to learn certain algorithms/ heuristics that "intelligence" is comprised of. No matter what you output. Training for optimal compression of tasks /taking actions -> could lead to intelligence being the best solution.

This is far from a formal argument but so is the stubborn reiteration off "it's just probabilities" or "it's just compression". Because this "just" thing is getting more an more capable of solving tasks that are surely not in the training data exactly like this.