It's basically for-profit piracy. Which is still kind of a shitty term because actual pirates weren't copying any of the goods they were taking.
The most neutral term might be copyright infringement, though that carries all the baggage of the 'should copyright even exist'-discussion.
Alternatively, you could shout 'they took our jobs' to complain that they are letting algorithms and engineers do the work that artists want to do. IDK what to call this, but 'theft' or 'robbery' doesn't sound right.
I think it's quite literally copyright infringement, assuming the models are fed with work from actual artists who typically don't agree to it. Whether copyright should work this way is another matter.