Yes, scaled AI content can be bad for SEO, but there's an important distinction.
Google isn't penalizing content simply because it was written using AI. What Google is targeting is scaled content abuse publishing hundreds or thousands of low-quality pages primarily to manipulate search rankings rather than help users.
This doesn't mean you can't use AI to create content. I use AI myself. The problem starts when websites mass producing articles without fact-checking, editorial oversight, or adding anything useful.
Google already has systems designed to detect spammy content patterns, regardless of whether the content was written by AI or a human. However, there's no confirmed evidence that Google is developing an algorithm specifically to detect and penalize all AI-generated content.