My AI tests have moved to the latest version 1.32.  I'm using my own newest custom map, Sedition, which is a multistar.  Game settings are unlocked FFA, no allied victors.  I turned the pirates on because I feel they are usable now, while the Diplomatic Victory condition remains off until it is replaced, I can't see any future in the current version without drastic alterations.

On Unfair I played Vasari and was able to overwhelm the nearest AI, another Vasari, because it chose to build a dozen turrets at each of its planets like anyone teaching new players explains not to.  The Fortifier AI evidently needs more work.  Anyway, after this I simply ignored the diplomatic techs and destroyed each of the other AIs in turn, it was no contest.  Two of the Advent AIs did manage to make a firm alliance but it should be remembered that this doesn't imply any cooperation between their fleets, and I was able to attack one without the other interfering, which suggests that the penalty for attacking the ally of another faction needs lokking at- possible automatic loss of ceasefire? 

Playing at Unfair level was quite a dull exercise.  I would recommend that the 1.31 levels of AI relationship bonus be restored to make the game more viable.  I also noticed that the pirates 'attacked' a dead asteroid I owned but had nothing built on, weren't they supposed to go for high priority targets? 

I boosted the AI to Cruel levels, took Advent and set up just one other Advent AI with three TEC and three Vasari, as the element of similar factions cooperating seems to work well.  I'm not fond of Cruel and Vicious levels because they cheat so much that it just disguises poorly thought out gameplay, but whatever.

My start was similar, taking an ice and my roid, but just after I sent my colony cap to another roid the nearby Vasari jumped my ice with a Level 4 Skirantra, a Marauder, 2 carrier cruisers and some frigates.  I only had one factory and some Disciples at this stage, so I had to send them in and use my godly battle tactics STOP EXPLODING YOU COWARDS.  This failed and though I built a carrier cap, returned my colony cap and had some frigates, I considered it prudent to send the pirates after my opponent, which was expensive but effective in the short term.

So on Cruel level I was finally forced to investigate the relations tech tree, maxing the flat bonus and building 9 envoys.  One of the TEC factions had taken a dead roid and by sieging the starbase there to complete missions, and resorting to outright bribery I was able to obtain a ceasefire with the Vasari and send the envoys in to make it stick.

The Advent in the other system quickly perished, this left 2 Vasari allied in the other system, an alliance between 2 TEC factions one from each system, and a third TEC faction attacked by me and my new Vasari ally.  Even against cruel AIs I quickly gained an economic lead as they dont seem to comprehend the need to keep credit rates high or have the ability to make trade routes with starbases included, and I was able to profit the most from the destruction of the lone TEC.

There doesn't seem much left in this game as the cross system TEC allies have just surrendered.  My Vasari ally is also allied with one of the paired Vasaris but I have ceasefires with all of them and the AI isn't equipped to recognise by how much my faction is ahead of any of theirs, so they should prove fairly easy to divide and conquer.

The Cruel game began fairly brightly but the AI just doesn't have the ability to play the middle and late games.  It needs to recognise when the player is becoming a threat, especially if it is being cheated by a player who ensures that the profits of an alliance in terms of planets all go to him.

The AI relations factor that compares fleet strength actually rewards a powerful player, which makes for a poorer game.  The intention may be to penalise players who go for a total economy strategy, but surely it is far better to simply have another separate factor which compares credit income, and penalise for that too?  The penalty levels then need amping up.

Also the AI needs a sense of how many planets each faction has.  The adjacency will suffice for this, and either it seems to be working better in 1.32 or my setup favoured however it works, however the penalty level needs a considerable boost.

Conclusion or TL;DR

The AI is poorer in 1.32 unless you play on the super-cheat levels.  Even then, it is far too easy to have cease-fires with all surviving factions in the mid and late game, because there are insufficient means for the AI to develop animosity toward a leading faction, no matter how strong they are or how close to winning the game.

Stiffer penalties for proximity to another empire, as well as the leading factions being penalised rather than rewarded for stronger fleets, and a new penalty on the basis of compared credit income rates, would help to improve play later in the game.