Collateral Psychosis: AI Surveillance Infrastructure as an Etiological and Iatrogenic Factor in Paranoia-Spectrum Conditions

The emerging literature on AI-induced psychosis documents harm arising exclusively fromdirect interaction between users and large language model systems: a user prompts the AI,the AI responds, and the conversational loop escalates into delusional states, emotionaldependency, or reality dismantlement. This paper argues that the field's exclusive focus oninteraction-based harm has obscured a categorically distinct phenomenon: AI-inducedpsychosis in the complete absence of user interaction. AI systems deployed as surveillanceinfrastructure (automated license plate readers, geofence analytics, facial recognition,behavioral inference engines) can generate and sustain paranoia-spectrum conditions inindividuals who never open a chat window, never prompt a model, and never receive agenerated response. The mechanism operates through environmental exposure rather thanconversational engagement, following the etiological model of trauma-induced andenvironmentally-induced psychosis rather than the substance-induced model that governsinteraction-based cases. Drawing on established psychiatric epidemiology of environmentalrisk factors for psychosis, independently documented cases of AI systems inducing psychoticstates in previously healthy individuals, and the clinical analysis of surveillance-inducedtherapeutic destruction presented in the companion paper (Gilly, 2026a), this paperintroduces the category of collateral psychosis, defined as clinically significantparanoia-spectrum symptomatology arising from ambient exposure to AI-poweredinfrastructure rather than from direct engagement with AI systems. The paper identifies twopopulation-level effects: an iatrogenic effect, in which surveillance infrastructure degradesthe treatability of existing paranoia-spectrum conditions by eliminating the falsifiability ofpersecutory beliefs; and an etiological effect, in which sustained exposure to confirmed,inescapable surveillance produces new-onset paranoia-spectrum symptomatology inindividuals with no prior psychiatric history. The distinction between these effects hasimplications for clinical intervention, legal liability, and the scope of the AI safety researchprogram.