No. AI can generate as much synthetic data as we need, on demand. Many SOTA models, in fact, are already being trained with synthetic AI-generated data. See https://en.wikipedia.org/wiki/Betteridge's_law_of_headlines
I don't think this is right.
Can I take an untrained LLM (a neural network with random parameters), and have it start generating garbage, and then train the network to produce more of the same and then have it bootstrap itself to intelligence? Of course not.
What if I train it just a little bit first? What if I train it until it produces gibberish, but does occasionally string two words together that are spelled correctly. Can I have it produce petabytes of gibberish and then train on that to reach GTP4's level?
You seem to argue that at some point, the AI is able to improve by training on its own output. At what point does that arrive? Because so far we've never seen an AI improve based on its own output. (As far as I know?)