When I was there, a long time ago, exams were timed and were usually open book open note. Blue books were filled in. You were trusted to adhere by those rules, and most students did their exams in their dorm rooms.
The evidence that the students honored the rules was some exams resulted in a 50% failure rate.
As for me, I went there because I wanted to learn the material. I did not care about getting a diploma. (Mine is in the basement somewhere.) I did not take any "easy A" classes, because I wanted a return on my time and tuition investment. (Though, easy A classes were hard to find at Caltech.) I wasn't even going to attend graduation, but my parents showed up and I attended to please them.
The classes, year by year, were dependent on mastering the previous year's classes. So if you cheat with AI, you're digging yourself into a bigger and bigger hole. Caltech rewires your brain. If you don't learn the stuff, you're going to be one of those EEs who carries around a card with V=A*R, V/A=R, V/R=A printed on it.