Understanding is the thing that happens when your neurons coalesce into a network of signaling and processing such that it empowers successful prediction of what happens next. This powers things like extrapolation, filling in missing parts of perceived patterns, temporal projection, and modeling hidden variables.

Understanding is the construction of a valid model. In biological brains, it's a vast parallelized network columns and neuron clusters in coordinated asynchronous operation, orchestrated to ingest millions of data points both internal and external, which result in a complex and sophisticated construct comprising the entirety of our subjective experience.

LLMs don't have the subjective experience module, explicitly. They're able to emulate the bits that are relevant to being good at predicting things, so it's possible that every individual token inference process produces a novel "flash" of subjective experience, but absent the explicit construct and a persistent and coherent self construct, it's not mapping the understanding to the larger context of its understanding of its self in the same way humans do it. The only place where the algorithmic qualities needed for subjective experience reside in LLMs is the test-time process slice, and because the weights themselves are unchanged in relation to any novel understanding which arises, there's no imprint left behind by the sensory stream (text, image, audio, etc.) Absent the imprint mechanism, there's no possibility to perpetuate the construct we think of as conscious experience, so for LLMs, there can never be more than individual flashes of subjectivity, and those would be limited to very low resolution correlations a degree or more of separation away from the direct experience of any sensory inputs, whereas in humans the streams are tightly coupled to processing, update in real-time, and persist through the lifetime of the mind.

The pieces being modeled are the ones that are useful. The utility of consciousness has been underexplored; it's possible that it might be useful in coordination and orchestration of the bits and pieces of "minds" that are needed to operate intelligently over arbitrarily long horizon planning, abstract generalization out of distribution, intuitive leaps between domains that only relate across multiple degrees of separation between abstract principles, and so on. It could be that consciousness will arise as an epiphenomenological outcome from the successful linking together of systems that solve the problems LLMs currently face, and the things which overcome the jagged capabilities differential are the things that make persons out of human minds.

It might also be possible to orchestrate and coordinate those capabilities without bringing a new mind along for the ride, which would be ideal. It's probably very important that we figure out what the case is, and not carelessly summon a tortured soul into existence.