"Model collapse" is a popular idea among the people who know nothing about AI, but it doesn't seem to be happening in real world. Dataset quality estimation shows no data quality drop over time, despite the estimates of "AI contamination" trickling up over time. Some data quality estimates show weak inverse effects (dataset quality is rising over time a little?), which is a mindfuck.
The performance of frontier AI systems also keeps improving, which is entirely expected. So does price-performance. One of the most "automation-relevant" performance metrics is "ability to complete long tasks", and that shows vaguely exponential growth.