I have been playing a few games and some things pop up in regards to the AI. The AI is indeed very sophisticated but rarely puts up a challenge, because it does some very dumb things. Just played a Large map and ended up facing Roseln, who did terrible. They built stupid units like widows and all their champions had tons of injuries. They also failed to kill the Darkling lairs all around them. After examining the situation I think I know the root of their problem. The AI is just horrible inefficient when it only has a few cities. Later if they get a ton of cities they can compete but they are horrible at managing a small empire of 2-4 cities.
First of all the AI still doesn't get that it should be prioritizing workshops and bell towers. Instead it always wants to build pointless monuments in new cities. Unless they are in dire need of some resource the AI should always be building unrest and production buildings before everything else, and they never ever do even though there have been many threads about it. This cannot be overstated.
Secondly, the AI still doesn't use specialized cities at all. I have played a lot of games and let me tell unless an early empire without both a fortress and a conclave is seriously handicapped. If you even have 1 of every city type and properly specialize them you can keep up with huge empires but without 1 of each you will fall behind hard. The AI not only is usually missing one type unless it gets a lot of cities but it doesn't use them optimally at all. Every city type has a single purpose that takes priority over everything else. However the AI seems to just build randomly from them all. Even claiming world resources is almost always a waste of time early game unless the city is already specialized and has basic improvements already.
Towns are for producing gold, food, and usually pioneers. After production and unrest you should build gold buildings and food buildings in that order. Only then should other things be built. This actually means that they are the least necessary. Don't build them first unless you think you will have lots of room for the other types. They can be built on suboptimal locations like 2/3/0 with no real consequences. Unless you have no fortresses you should not be building troops from this city type.
Fortresses are built in high production spots and having some essence is a bonus. This is where all your troops should be built. However building the improvements that help build troops like workshops and barracks is first necessary.
Conclaves are very important for research. Without one early game your research will be very very slow, and you will fall behind. Build them in places with essence but even without it you can still get a fair bit of research from them early game.
Simply put all cities should prioritize in the below orders.
*Resources means World Resources around the city and includes monuments if they would reach them. Obviously these should only be built if the AI needs them.
If the AI could just grasp how to manage a early game empire of only a few cities then it would be much more challenging. Sometimes through luck it will do the right thing and be very dangerous but most the time it doesn't come close and stalls hard. This early game lack of tech and units is what gets it's champions killed and allows lairs around them to evolve and trap them.