Synthetic Data: The North Star for Generative AI – Part II

Following up from Part 1, where we broke down the basics of synthetic data—how it’s generated and the technical hurdles AI developers face—this article dives into what it all means for creative professionals and the industry as a whole.

With companies like DeepSeek making big moves in this space, the conversation is heating up. How does synthetic data shape AI-generated content? What does it mean for attribution, ownership, and creative integrity? Let’s unpack it.

Imagine this: A young musician uploads their latest track online. Six months later, they hear a nearly identical song topping the streaming charts—created by an AI. Their name? Nowhere to be found. Their influence? Uncredited. Their income? Gone.

Welcome to the world of synthetic data.

Once just a niche tool for AI experimentation, synthetic data has now become the driving force—the North Star—for generative AI companies. It’s no longer just a technical breakthrough; it’s a fundamental shift that could redefine the very value of creativity itself.

In Part 1, we explored what synthetic data is, how it’s generated, and the main technical challenges developers face. Now, let’s get into the real-world implications:

• How does synthetic data weaken demand for real human creativity?
• What happens when attribution fails, leaving creators with no proof that their work influenced an AI hit?
• And most importantly—can artists still thrive alongside AI, or are we watching our own digital shadows replace us?

Here’s the hard truth: while high-quality, original data is still the gold standard, AI companies increasingly view it as a stepping stone rather than a necessity. Today, synthetic data still relies on real-world sources for training, but that dependency won’t last forever. As these systems improve, the need for original artistry will shrink—putting creators at risk of being sidelined entirely.

By 2028, 24% of the music market is expected to be lost to AI, a seismic shift that threatens the very income streams many artists rely on. AI-generated compositions will flood the market, driving down the demand for human-made work. Meanwhile, the Music AI industry is projected to grow into a $42 billion market within the next three years, with massive profits flowing to companies—while creators struggle to retain control over their work.

For artists, this means fewer opportunities, diminished bargaining power, and an urgent need to adapt to this shifting landscape.

Let’s dig into why synthetic data has become the North Star for AI companies—and what creators need to know to protect their work.

1. Why Synthetic Data is the North Star for AI Companies

Elon Musk’s statement that “AI companies have run out of data” underscores why synthetic data is becoming the cornerstone of the industry. For AI companies, fixing the synthetic data issue is not just desirable—it’s essential for long-term success. Here’s why:

• Cost-Effectiveness: Licensing fees and royalties create ongoing financial burdens for AI companies. Solving the synthetic data problem requires a one-time investment in high-quality synthetic datasets, allowing models to be trained indefinitely without recurring costs.
• Scalability: Synthetic data enables AI companies to scale exponentially, generating vast amounts of training content at a fraction of the cost and time required for licensing real-world datasets. For example, in the music industry, an AI model trained on a limited set of licensed tracks could use synthetic data to generate an entire library of similar compositions. Similarly, AI could analyze thousands of scripts in the film industry and churn out storylines tailored to maximize audience engagement, sidelining screenwriters. Synthetic data could create endless stock image variations based on a single photo, undercutting photographers relying on licensing fees. These companies can produce endless variations without repeatedly paying for original creations, creating a massive competitive advantage that leaves creators struggling to keep up. This scalability is a game-changer, removing the bottlenecks of traditional licensing agreements.
• Autonomy and Control: Fixing the synthetic data issue gives AI companies complete control over their training data, eliminating reliance on external rights holders. This autonomy reduces legal and logistical hurdles and allows AI models to be tailored precisely to specific objectives. DeepSeek’s R1 model provides a real-world example of this shift. Instead of relying on human-labeled data, it was fine-tuned using 600,000 AI-generated reasoning samples. The reinforcement learning process was also synthetic, using rule-based rewards to improve reasoning accuracy without human intervention. The takeaway is clear: once AI models are self-sufficient in generating high-quality training data, their need for original human-created works will drop to near zero.

While synthetic data is undoubtedly the future for AI companies, creators must recognize that this trajectory doesn’t prioritize their contributions. AI companies’ primary focus is often user experience and cost savings, not fair attribution or compensation. Without proper safeguards, creators risk being marginalized as synthetic data becomes more dominant.

2. The Risks for Creators

Synthetic data’s rise poses significant challenges for human artists, from economic displacement to cultural homogenization. What happens when your creativity fuels an AI model that no longer needs you? Can you compete with machines churning content faster, cheaper, and without breaks? Imagine a world where AI-generated music or art becomes so pervasive that mass-produced, algorithmic creations drown out regional styles, cultural nuances, and unique artistic voices. For instance, consider traditional folk music—a genre rooted in centuries of cultural heritage. AI systems could take the essence of these sounds and repurpose them for global appeal, erasing their authenticity. Similarly, niche film genres or regional photography styles could fade away as AI focuses on generating content tailored for broad commercial success, diminishing cultural diversity and homogenizing creative expression. Here’s what’s at stake:

• Erosion of Value: As AI becomes better at mimicking human creativity, the market for authentic, human-created creations shrinks, diminishing its perceived value over time.
• Loss of Control: Synthetic data models often function as black boxes. Without transparent attribution systems, creators can’t verify how their work was used in AI training, leaving them vulnerable to exploitation.
• Economic Displacement: AI’s ability to produce vast amounts of content at minimal cost creates an uneven playing field. Individual creators can’t compete with the sheer volume and speed of AI-generated content, and as synthetic data improves, the need for original data may diminish entirely.

3. How Synthetic Data Can Be Misused

Even companies with ethical intentions (check my blog about Ethical AI) may (un)intentionally (eventually) distort or bypass attribution. Creators need to be aware of the potential pitfalls, such as:

• Threshold Manipulation: AI models may rely on data that fulfills a prompt but falls just below a compensation threshold.
• Data Augmentation: Companies might use a creator’s original work to generate thousands of variations for training without compensating them for each iteration.
• Synthetic Recycling: Outputs generated by original data can be used to train future models, reducing the need for the creator’s input entirely.
• Opaque Attribution: Without third-party frameworks, it’s impossible for creators to track how their data is used, making fair compensation unlikely.

4. A Playbook for Protecting Your Creativity

The stakes have never been higher for creators in the age of AI. The decisions you make today could determine whether your work thrives or disappears into the shadows of synthetic data dominance. This isn’t about some far-off future. It’s happening now. Your work—your creativity—is at risk. But you have a choice. You can stand by and watch, or you can act. Here’s how to safeguard your work in an AI-driven world:

1. Opt-Out, Then Opt-In Strategically: Start by opting out of AI training datasets where possible to protect your assets. Only opt-in under controlled environments with full transparency and guaranteed attribution.
2. Work with Third-Party Attribution Systems: Avoid relying on AI companies’ internal attribution claims. Insist on third-party systems, like Sureel.ai, to ensure your contributions are properly tracked and credited.
3. Push for Tiered Compensation Models: Upfront payments and flat licensing fees might seem attractive, but they accelerate the obsolescence of original contributions. Advocate for models that compensate you based on the ongoing influence of your work.
4. Include Anti-Synthetic Clauses in Contracts: Protect your work by explicitly prohibiting its use for generating synthetic datasets without your consent. This ensures your creations aren’t repurposed to fuel synthetic data pipelines.

5. A Call to Action

The future of creativity is being shaped now—and it hangs in the balance. Synthetic data represents both an opportunity and a threat, offering immense potential for innovation while posing profound risks to the creative spirit. Without proactive steps, we risk entering a world where human ingenuity is sidelined, and synthetic ones drown out authentic voices. Creators who understand these stakes and act decisively can ensure their work remains not just relevant but vital to the evolving creative ecosystem.

Don’t let synthetic data diminish your worth. If creators fail to act now, they risk losing control over their work, watching their contributions be devalued and sidelined. Demand transparency, champion robust third-party attribution systems, and collaborate responsibly with AI companies that prioritize fairness. Your choices today could mean the difference between thriving in this new era or being erased by it. By taking these steps, you can protect your work and thrive in an AI-driven world.

As I’ve said before, do NOT get synthesized. Let’s ensure that creativity remains a human endeavor driven by our unique perspectives, emotions, and imagination.?