I keep on seeing this claim, especially from popular creators such as 3Blue1Brown. How is this not borderline vacuous?

I'm not a LessWrong^TM rationalist guy, but one really good thought experiment I always keep in the back of my mind from them is Solomonoff induction. AIT people take it as a framework to work with - it's pretty cool, I agree. But I (and some other people, such as certain AI execs at Amazon - according to my interpretation of their public interviews) think it just highlights the trap - given an arbitrarily powerful oracle, you can get compression down pat. Like, if you assume the source is generatable with a turing machine, and you write a function to brute force over all turing machines, then whoa, your compression works. You will necessarily find the optimal compression at some point because your search function is literally searching over all possible turing machines that could've generated the input sequence, anyways (because the input sequence was generated by a turing machine)

These are the kinds of results you can get if you don't have any actual constraints on what the compressor can do.

(Of course, again - this is not the point of solomonoff induction - it's to use this as a base truth, to then layer parsimony on top of that. There are infinite number of turing machines that could match your prefix, parsimony filters, throw some bayesian inference on top of that, and you get Solomonoff induction. They constrain it afterwards. But I think to that intuition as a base whenever people claim new results.).

But I see in casual conversation, people constantly making claims like, "LLM's are so good because they compress a model of the world". What is that model then? Scott Aaronson has made points like this before - your "model" could just be a massive lookup table, so you can't just claim "compression" and win - the compressor must be reasonably small, too.

I don't object to the notion that LLM's have some notion of world models more sophisticated than memorization. That's proven by actual interventional experiments, such as the ones that actual interperability researchers do. But mere compression is vacuously powerful. "Vacuous" not in the sense that "oh, you might be suboptimal and be a little more complex", vacuous as in "the philosophical point you were trying to make is vacuous because you make a vacuously powerful statement".

(I'm not a total fan of intervention either, as an end-all gospel as some people use, but it's far, far better than not having it).

The key principle is simple.

If you want to best predict what state comes next from a space of possibilities, you have to figure out how probable each next state is and pick the most probable one.

If you want to compress something, you have to figure out how probable each next next state is and assign the smallest code to the most probable state.

These two processes are essentially the same, and the resulting structure of a system which regulates either process will be similar, approaching the same structure at high confidence.