Recent advances in generative video modeling, driven by large-scale datasets and powerful architectures, have yielded remarkable visual realism. However, emerging evidence suggests that simply scaling data and model size does not endow these systems with an understanding of the underlying physical laws that govern real-world dynamics. Existing approaches often fail to capture or enforce such physical consistency, resulting in unrealistic motion and dynamics. In his work, we investigate whether integrating the inference of latent physical properties directly into the video generation process can equip models with the ability to produce physically plausible videos. To this end, we propose Phantom, a Physics-Infused Video Generation model that jointly models the visual content and latent physical dynamics. Conditioned on observed video frames and inferred physical states, Phantom jointly predicts latent physical dynamics and generates future video frames. Phantom leverages a physics-aware video representation that serves as an abstract yet informaive embedding of the underlying physics, facilitating the joint prediction of physical dynamics alongside video content without requiring an explicit specification of a complex set of physical dynamics and properties. By integrating the inference of physical-aware video representation directly into the video generation process, Phantom produces video sequences that are both visually realistic and physically consistent. Quantitative and qualitative results on both standard video generation and physics-aware benchmarks demonstrate that Phantom not only outperforms existing methods in terms of adherence to physical dynamics but also delivers competitive perceptual fidelity.

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