I've seen this a few times now. Most recently I was just playing a game yesterday where Kraxis kept swarming over my borders with huge amounts of troops and only the AI's stupidity allowed me to kill them with my much smaller army.

Then I noticed something strange on the diplomacy screen when talking to Kraxis. He had around -68000 gildar! Suddenly it made a lot more sense that he just kept pumping out Sion troops non-stop in all his cities. He was simply following the modern principles of deficit spending.

As much as I like realism, this must be a bug.