Vision-language models lag human performance on physical dynamics and intent reasoning

Spatial intelligence is central to embodied cognition, yet contemporary AI systems still struggle to reason about physical interactions in open-world human environments. Despite strong performance on controlled benchmarks, vision-language models often fail to jointly model physical dynamics, reference frames, and the latent human intentions that drive spatial change. We introduce Teleo-Spatial Intelligence (TSI), a reasoning capability that links spatiotemporal change to goal-directed structure. To evaluate TSI, we present EscherVerse, a large-scale open-world resource built from 11,328 real-world videos, including an 8,000-example benchmark and a 35,963-example instruction-tuning set. Across 27 state-of-the-art vision-language models and an independent analysis of first-pass human responses from 11 annotators, we identify a persistent teleo-spatial reasoning gap: the strongest proprietary model achieves 57.26\% overall accuracy, far below first-pass human performance, which ranges from 84.81\% to 95.14\% with a mean of 90.62\%. Fine-tuning on real-world, intent-aware data narrows this gap for open-weight models, but does not close it. EscherVerse provides a diagnostic testbed for purpose-aware spatial reasoning and highlights a critical gap between pattern recognition and human-level understanding in embodied AI.