What are they getting for their money?

It's a marketing campaign to devalue Linux in the public eye.

If they can state that AI came up with a "good enough" distro you know what non-savvy people will think about it: that making a distro is "easy", and "anybody can do it", and that anybody involved with making distros "manually" is redundant and giving themselves airs etc.

It has already happened to many other fields.