From Language Models to World-Acting Systems: Progress and Limits of Agentic AI across Digital, Social, Virtual, and Physical Environments

Realistic environment replicas are increasingly valuable for training and evaluating LLM agents, yet the original systems may be inaccessible or impractical to reproduce. We explore agentic language world modeling: rather than rebuilding an executable environment, a world model agent serves as the environment for a task agent and supports faithful and stateful simulation. We instantiate this paradigm with Trace2Env, a learning-free framework for settings where the original system is unavailable but historical interaction traces remain accessible. Trace2Env reconstructs these traces into a reusable environment worldbook containing environment schemas, grounded evidence, and induced behavioral knowledge. At runtime, the world model agent actively consults the worldbook together with persistent episodic state to infer each action's observation and lasting state effects. Across nine environments, Trace2Env improves both next-observation fidelity and long-horizon interaction consistency over conventional prompt-based LWMs. In multi-turn interaction, task agent actions generated against Trace2Env remain valid more often when replayed in the real environment, indicating that its simulated dynamics better preserve the consequences of earlier actions across successive turns. These results establish agentic language world modeling as an alternative direction for building realistic environment replicas without reconstructing the original executable system.

As AI systems move from generating text to accomplishing goals through sustained interaction, the ability to model environment dynamics becomes a central bottleneck. Agents that manipulate objects, navigate software, coordinate with others, or design experiments require predictive environment models, yet the term world model carries different meanings across research communities. We introduce a "levels x laws" taxonomy organized along two axes. The first defines three capability levels: L1 Predictor, which learns one-step local transition operators; L2 Simulator, which composes them into multi-step, action-conditioned rollouts that respect domain laws; and L3 Evolver, which autonomously revises its own model when predictions fail against new evidence. The second identifies four governing-law regimes: physical, digital, social, and scientific. These regimes determine what constraints a world model must satisfy and where it is most likely to fail. Using this framework, we synthesize over 400 works and summarize more than 100 representative systems spanning model-based reinforcement learning, video generation, web and GUI agents, multi-agent social simulation, and AI-driven scientific discovery. We analyze methods, failure modes, and evaluation practices across level-regime pairs, propose decision-centric evaluation principles and a minimal reproducible evaluation package, and outline architectural guidance, open problems, and governance challenges. The resulting roadmap connects previously isolated communities and charts a path from passive next-step prediction toward world models that can simulate, and ultimately reshape, the environments in which agents operate. Code and resources are available at: https://github.com/matrix-agent/awesome-agentic-world-modeling.

Large language models now power autonomous agents capable of complex, multi-step tasks in different environments. Accurate and reliable execution of these tasks requires the agent to predict the results of its actions. Recent research proposes to enhance predictive capabilities via specially trained environment simulators-world models. While world models can improve performance, they can also mislead agents into executing harmful actions, creating significant security and privacy risks. In this paper, we raise security concerns regarding the usage of world models in agentic systems. We discover a range of world model specific vulnerabilities, which can be exploited in terminal-based agents to execute malicious code or extract sensitive data. To facilitate future development, we introduce a security benchmark dataset designed for text-based world models. We argue that some risks are intrinsic to approximate world modeling, and show that attackers can induce mispredictions in agentic pipelines with up to 95% success rate, possibly resulting in unintended command execution, denial of service, drainage of wallet and private information extraction. Finally, we provide practical recommendations for practitioners to mitigate the discovered harms and harden agentic systems.