The term "Artificial Intelligence" is actually a perfectly cromulent word to be using for stuff like LLMs. This is one of those rare situations where a technical term of art is being used in pop culture in the correct way.
The term "Artificial Intelligence" is an umbrella term for a wide range of algorithms and techniques that has been in use by the scientific and engineering communities for over half a century. The term was brought into use by the Dartmouth workshop in 1956.
They're the ones who are putting the open-source base models out in the first place. If I write a program myself and release it as open source, I have every right to subsequently release a closed-source version. But I can't rescind the license on the version I released previously (any open source license with a clause allowing that should be treated with immense suspicion) so anyone else can keep building on that version if they want.