# The Predictive-Causal Gap: An Impossibility Theorem and Large-Scale Neural Evidence

arXiv: https://arxiv.org/abs/2605.05029 · HTML: https://mlsanity.com/paper/2605.05029/

## Key facts

- No citing papers in the map yet (data through 14 Oct 2026).
- Builds on 4 of its 8 references that are in the map.
- First posted on arXiv 6 May 2026.

## Builds on (most cited first, 4 of 4)

- [Scaling Laws for Neural Language Models](https://mlsanity.com/paper/2001.08361/) (2020)
- [Training Compute-Optimal Large Language Models](https://mlsanity.com/paper/2203.15556/) (2022)
- [Efficiently Modeling Long Sequences with Structured State Spaces](https://mlsanity.com/paper/2111.00396/) (2021)
- [Mastering Diverse Domains through World Models](https://mlsanity.com/paper/2301.04104/) (2023)

## Abstract (arXiv)

We report a systematic failure mode in predictive representation learning. Across 2695 neural network configurations trained to predict linear-Gaussian dynamics, the optimal encoder tracks the environment rather than the system it is meant to model. The mean causal fidelity -- the fraction of encoder sensitivity allocated to system degrees of freedom -- is 0.49, and only 2.5% of configurations exceed 0.70. The failure intensifies with dimension: at N=100, the optimal encoder becomes causally blind (fidelity ~10^{-8}) while achieving 92% lower prediction error than the causal representation. We prove this is not an optimization artifact but a structural property of the predictive objective: when environment modes are slower or less noisy than system modes, every minimizer of the population risk encodes the former. The set of dynamics exhibiting this predictive-causal gap is open and of positive measure in parameter space. In a nonlinear Duffing-GRU sweep, unconstrained predictors learn environment-dominant representations in 55% of tasks (95% CI 41--68%) versus 24% under operational grounding (p=2.3e-3); the median out-of-distribution MSE inflation under environment shift is 1.82x versus 1.00x. Operational grounding -- restricting the loss to system observables -- partially suppresses the gap, but causal fidelity is never recovered without an explicit system-environment boundary. The results identify the predictive-causal gap as a structural limit of learning, with implications for self-supervised representation learning, world models, and the scaling paradigm.