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The application of artificial intelligence (AI) in materials science has revolutionized predictive modeling, enabling the efficient exploration of chemical spaces and the optimization of properties. However, the field’s dependence on finite experimental datasets has led to extensive synthetic data generation and dataset recycling, posing risks to model sustainability. This conceptual manuscript defines model collapse in materials AI as the gradual erosion of model performance and diversity stemming from repeated training on recycled or synthetically derived data. Informed by generative AI theories, it explores how overuse of datasets contributes to knowledge decay, in which models progressively favor averaged representations, diminishing their capacity to model atypical material behaviors or emergent properties. A new conceptual framework is presented that outlines the iterative processes of data recycling, synthetic augmentation, and decay escalation. This framework identifies reinforcing cycles that intensify representational biases and constrain exploratory potential in materials innovation. By integrating recent literature on AI instabilities and materials data challenges, the paper advocates a theoretical rethinking of data management to ensure the enduring utility of AI in materials science. Recent 2025 studies propose strategies such as golden ratio weighting and reinforcement-based synthetic data curation to avert collapse, underscoring the manuscript’s emphasis on proactive data governance for enduring AI utility in materials science. The discussion extends to broader AI ecosystems, stressing equilibrium between data utilization and knowledge preservation.