A system for real-time steering of a drill bit includes a drilling arrangement and a computing device in communication with the drilling arrangement. The system iteratively, or repeatedly, receives new data associated the wellbore. At each iteration, a model, for example an engineering model, is applied to the new data to produce an objective function defining the selected drilling parameter. The objective function is modified at each iteration to provide an updated value for the selected drilling parameter and an updated value for at least one controllable parameter. In one example, the function is modified using Bayesian optimization The system iteratively steers the drill bit to obtain the updated value for the selected drilling parameter by applying the updated value for at least one controllable parameter over the period of time that the wellbore is being formed.