Rethinking World Models for Safety-Critical Embodied Systems

World models have become a central abstraction in modern AI. The term now refers to several different objects: action-conditioned environment models, latent imagination models, future-video predictors, interactive neural simulators, latent predictive representations, and synthetic-data engines. Evaluation has broadened along with the term. Recent papers measure video realism, perceptual similarity, instruction following, physical plausibility, policy ranking, executability, planning success, and downstream policy improvement. This produces both metric diversity and a recurring problem of claim/evidence mismatch: papers sometimes make a stronger claim about what their model is useful for than their evaluation can establish. This paper surveys the recent literature and argues that, for models presented as world models for embodied decision-making, the more decisive issue is not whether the model generates visually convincing videos, but whether it supports reliable interventional reasoning, policy evaluation, planning, and policy optimization under intervention, policy-induced distribution shift, and long-horizon rollout. We organize the survey using an L0--L7 ladder spanning visual plausibility to policy optimization utility, noting that the levels cut across several orthogonal axes and so form an evidential hierarchy rather than a single scalar. The framework foregrounds interventional action fidelity, closed-loop rollout validity, reward/value prediction, policy-ranking agreement, optimization lift, model exploitability, and uncertainty calibration, with a minimal feasible reporting set for real-robot settings.

World models for embodied AI must be physically viable: constructed to answer intervention queries by representing the physical structure governing action outcomes, rather than merely predicting future observations. Existing observation-predictive world models can produce visually plausible but physically wrong rollouts. This failure is structural; distinct physical systems can look identical yet diverge under intervention. We expose this problem with controlled benchmarks that fix the visible scene while varying latent physics. We show that such models may recommend infeasible actions, mispredict interaction outcomes, or certify unsafe behavior. We argue that embodied AI requires world models that identify the simplest physical abstraction sufficient to answer an intervention query. Such a model comprises modular components, including environment representation, latent state and parameter estimation, action specification, interventional dynamics, and query-level response. An autonomous orchestrator should identify the relevant abstraction and compose compatible learned and structured components per query. When closed-form physics is unavailable, uncertain, or costly, the transition model may be analytic, simulated, learned, or hybrid, but it must preserve the structure that determines interventional outcomes. This decomposition makes the model interpretable, its components verifiable, and its outputs auditable against the query. It also provides a design principle for new world models and a feasibility test for existing ones: the right abstraction is not the most detailed model of the world, but the simplest model that preserves the distinctions relevant to the query. We demonstrate this approach on queries that existing systems fail to answer correctly, and outline how an orchestrator can dynamically assemble and adapt physically viable models for planning, control, and verification.

World models connect perception and decision-making in embodied intelligence by maintaining hidden state, anticipating consequences, comparing interventions, and adapting when execution departs from expectations. Although progress is often measured by visual fidelity, their value lies in improving behavior. Before reaching for a cup, a person anticipates its weight and resistance to grasping, shaping the hand before contact. Such anticipation is coarse and rarely pictorial, yet it guides action. This raises a central question: which predictive capabilities improve behavior? Existing surveys, organized by architecture, output modality, or application domain, leave this question implicit. We introduce three progressively stronger capability levels: Plausible models preserve task-relevant temporal, geometric, or physical structure; Controllable models additionally predict how interventions alter that structure; and Actionable models translate predictions into measurable gains in planning, action, learning, evaluation, verification, recovery, or data selection. We complement this hierarchy with a 3 x 4 matrix crossing geometry, physics, and action grounding with improvement loops centered on data, rewards, policies, and the model itself. Using this framework, we survey manipulation, navigation, locomotion, autonomous driving, and general embodied learning, tracing technical progressions, clarifying capability requirements, and examining datasets, benchmarks, and evaluation protocols. We identify challenges in long-horizon consistency, uncertainty calibration, causal intervention testing, latency, verification and recovery, and cross-embodiment transfer. This perspective shifts evaluation from visual plausibility toward whether predictions capture task-relevant state, reflect intervention effects, and improve the closed-loop behavior of embodied agents.