It's a reasonable hypothesis. Being good at calculating 'What would happen next if {x}' is a decent working definition of baseline intelligence, and the capabilities of language allow for much longer chains of thought than what is possible from a purely reactive approach.
Entering the realm of Just My Opinion, I wouldn't be surprised at all if internal theory of mind is simply an emergent property of increasing next-token prediction capability. At a certain point, you hit a phase change, where intelligence loops back on itself to include its own operation as part of its predictions, and there you go- (some form) of self-awareness.
Entering the realm of Just My Opinion, I wouldn't be surprised at all if internal theory of mind is simply an emergent property of increasing next-token prediction capability. At a certain point, you hit a phase change, where intelligence loops back on itself to include its own operation as part of its predictions, and there you go- (some form) of self-awareness.