A proprietary version of this technology is already training Waymo's robot cars. Waymo blogged about their DeepMind-provided world model a year ago.
> It’s so obviously not representative of the real world.
That entirely depends on the use-case and level of granularity needed, doesn't it?
They clearly know how to train robots. Unless Genie is a misdirection...
When your training simulation fails to reproduce certain features of the real-world environment, your control model is likely to have trouble with them, so more realistic simulations are helpful, but even fairly unrealistic training simulations are pretty useful.
In general, training neural networks to control robots is going to require simulations, ideally differentiable simulations. Even if they aren't differentiable, though, you can SGD your simulated training runs across a data center in a way that you just can't with training runs on Roombas.