Explore the fascinating world of artificial intelligence and language models in this thought-provoking lecture from the Santa Fe Institute. Delve into the inner workings of machine learning systems, examining their ability to reason, understand, and generate human-like responses. Investigate the concept of mental models in AI, analyzing experiments involving bicycles and consistency. Discover the extended architecture of language models and their capacity for chain-of-thought reasoning. Engage with demonstrations of question-answering capabilities, teaching functions, and mathematical operations. Critically examine failure modes and test questions to understand the limitations of these systems. Conclude by exploring belief graphs and organizational needs in the context of AI development.