The most interesting/surprising development for me has been that LLMs are getting better and better at synthesizing procedural content.

Fable 5 can write procedural texture shaders, CSG, surface meshing, l-systems, even rigging + realtime IK, etc. and do it all in a visual loop within an environment. The model understands the topology, and can tune things with mathematical precision where necessary. Which is much closer to using 3D tools like an artist would.