If you have played with ye olde flip phone's T9 predictive feature as a child, trying to compose entire messages just by accepting the next word that comes to the phone's mind... that's ChatGPT, with the small difference of giving waaay better suggestions for the next word. But other than that, there is no understanding in the black box whatsoever.
That heavily depends on your definition of understanding, which is not easy to define. The vague definition I imply here is "the ability to make predictions based on higher order correlations extracted from the training data".
