What is synthetic data, and why is it used?
Data that is generated rather than collected — created by simulation, by statistical modelling of a real dataset, or increasingly by a machine learning model — and used where real data is unavailable, restricted, expensive or dangerously imbalanced.
Why it is used:
Privacy. Synthetic records that preserve the statistical structure of a real dataset without corresponding to any real individual can be shared where the original cannot. This is the largest driver, particularly in health and finance.
Scarcity. Rare events — equipment failures, fraud patterns, unusual medical presentations, edge-case driving scenarios — are by definition uncommon, so models see too few examples. Generating them deliberately addresses a real gap.
Imbalance. Where one class overwhelms another, synthetic examples of the minority class improve model performance.
Cost and danger. Simulating a vehicle approaching a pedestrian is cheaper and safer than staging it.
Labelling. Synthetic data comes with perfect labels by construction, which removes the largest cost in supervised learning.
Testing, where realistic but non-real data is needed in development environments.
The genuine limitations:
It inherits the biases of its source. A model trained on a biased dataset generates biased synthetic data, and the synthesis can obscure the bias by making it look like new evidence.
It cannot contain information that was not there. Synthetic data expands the sample, not the underlying knowledge — which is the most common misunderstanding.
Privacy is not automatic. Poorly generated synthetic data can allow membership inference — determining whether a specific individual was in the source data — so it requires formal privacy guarantees rather than an assumption.
Distribution mismatch, where synthetic examples are subtly unrealistic in ways that models learn and that fail on real inputs.
Model collapse, the concern that models trained repeatedly on the output of earlier models degrade over generations, losing the tails of the distribution. This is actively researched and is a real risk as more web content becomes machine-generated.
The practical rule: validate against real data, always.