The irony is I think GPT4 gives the best answer. It even gets the idea that language is inextricably tied up with our experiences of reality that most humans seem to simply not understand.
GPT4
"The statement that language models have a "model of reality" can be both true and false, depending on how you interpret "model of reality."
Language models like ChatGPT do have a kind of "model" in a broad sense. They have been trained on large amounts of text data from the internet and have learned statistical patterns from these data. This allows them to generate text that can seem sensible and knowledgeable about various aspects of reality.
However, this "model" is more akin to a very sophisticated pattern recognition system. It doesn't possess a deep or holistic understanding of reality as humans do. It doesn't form beliefs, doesn't have a consciousness, and doesn't experience the world in any sense. It can't learn from the environment or update its understanding over time. Its "knowledge" is fixed at the time it was last trained (for GPT-4, this is as of September 2021), and it can't incorporate new information or discoveries unless it's trained on new data.
Therefore, while language models like GPT-4 can simulate a kind of "knowledge" or "understanding" based on patterns in the data they were trained on, they don't have a model of reality in the sense of an evolving, interactive understanding based on sensory experience and reflection.
So, language models have a "model of reality" only in the sense that they mimic certain aspects of human language use, which is inextricably tied up with our experiences of reality. But this is quite different from possessing a human-like understanding or model of the world."