Replicator neural networks self-organize by using their inputs as desi
red outputs; they internally form a compressed representation for the
input data. A theorem shows that a dass of replicator networks can, th
rough the minimization of mean squared reconstruction error (for insta
nce, by training on raw data examples), carry out optimal data compres
sion for arbitrary data vector sources. Data manifolds, a new general
model of data sources, are then introduced and a second theorem shows
that, in a practically important limiting case, optimal-compression re
plicator networks operate by creating an essentially unique natural co
ordinate system for the manifold.