Natural environments are full of ambient noise; nevertheless, natural cognitive systems deal greatly with uncertainty but also have ways to suppress or ignore noise unrelated to the task at hand. For most intelligent tasks, experiences and observations have to be committed to memory and these representations of reality inform future decisions. We know that deep learned artificial neural networks (ANNs) often struggle with the formation of representations. This struggle may be due to the ANN’s fully interconnected, layered architecture. This forces information to be propagated over the entire system, which is different from natural brains that instead have sparsely distributed representations. Here we show how ambient noise causes neural substrates such as recurrent ANNs and long short-term memory neural networks to evolve more representations in order to function in these noisy environments, which also greatly improves their functionality. However, these systems also tend to further smear their representations over their internal states making them more vulnerable to internal noise. We also show that Markov Brains (MBs) are mostly unaffected by ambient noise, and their representations remain sparsely distributed (i.e. not smeared). This suggests that ambient noise helps to increase the amount of representations formed in neural networks, but also requires us to find additional solutions to prevent smearing of said representations.