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We presented and analyzed an approach for the generation of atomic spin-squeezed states. Our method involved the collective coupling of an atomic ensemble to a decaying mode of an open optical cavity. We demonstrated the existence of a collective atomic dark state, decoupled from the radiation field. Through the explicit construction of that state we found that it could feature spin squeezing bounded only by the Heisenberg limit. We showed that such dark states could be deterministically prepared via dissipative means, thus turning dissipation into a resource for entanglement. The scaling of the phase sensitivity taking realistic imperfections into account was discussed.

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