I believe Markov Chains as a model quickly become inefficient (specially memory-wise) as you increase the complexity (long range correlations) of your prediction. It's an unnecessarily restrictive model for high complexity behavior that state of the art RNNs skip entirely.
If your prediction is good enough that you can always come up with two possible predictions for each character, each of which has a 50% chance of being correct, then obviously you can compress your input down to one bit per character by storing just enough information to tell you which choice to pick. More generally, you can use arithmetic coding to do the same thing with an arbitrary set of letter probabilities, which is exactly what you get as the output of a neural network.
When the blog post says the model achieved a performance of "1.57 bits per character", that's just another way of saying "if we used the neural network as a compressor, this is how well it would perform."
Ther deat is more; for in thers that undiscorns the unwortune,
the pangs against a life, the law's we know no trave, the hear,
thers thus pause.
The only reason why it seems like the model can occasionally spell, and create anglo-sounding neologisms, is because it operates on 4-grams.Here's some character-by-character output from the same Markov Chain model.
T,omotsuo ait pw,, l f,s teo efoat t hoy tha fm nwo
bs rs a h enwcbr lwntikh wqmaohaaer ah es aer
mkazeoltl.etnhhifcmfeifnmeeoddssmusoat irca
do'ltyuntos sih i etsoatbrbdlmaybe the computer was drunk?
Second, even if it was, really? As if we see plays on Kundera titles regularly on the web?
I was thinking that both Eugene Wigner's 1960 article 'The Unreasonable Effectiveness of Mathematics in the Natural Sciences'[0] and Karpathy's 'The Unreasonable Effectiveness of Recurrent Neural Networks' probably touch deep aspects of the nature of existence. The first on why the universe exists and is mathematical - because at the fundamental level it is mathematical[1], and in Karpathy's case the RNNs are probably effective because they are close to the mechanisms of human consciousness.
[0] Wigner's article: http://www.dartmouth.edu/~matc/MathDrama/reading/Wigner.html
[1] 'physical world is completely mathematical' theory: http://en.wikipedia.org/wiki/The_Unreasonable_Effectiveness_...