Spontaneous self-organization (clustering) in magnetically oriented bacteria arises from attractive pairwise hydrodynamics, which are directly determined through experiment and corroborated by a simple analytical model. Lossless compression algorithms are used to identify the onset of many-body self-organization as a function of experimental tuning parameters. Cluster growth is governed by the interplay between hydrodynamic attraction and magnetic dipole repulsion, leading to logarithmic time dependence of the cluster size. The dynamics of these complex, far-from-equilibrium structures are relevant to broader phenomena in condensed matter, statistical mechanics, and biology.