OpenAI and Anthropic allege improper distillation of their models. Investors have pushed Chinese AI valuations sky-high anyway—raising a harder question about pricing power.

Artificial intelligence firm Anthropic has accused three AI firms of illicitly using its large language model Claude to improve their own models in a technique known as a “distillation” attack.

MiniMax and Zhipu are now worth some $60 bln combined after more than quadrupling this year. The hype evokes the path taken by automakers like Nio, which soared to wild valuations and then got crushed ...