Brad has stated that he wants to add another difficulty above normal where the AI has FOW, but will remember ships it has seen.
I want to have 2 more difficulty levels. One just sub-normal and 1 between normal and gifted.
I don't feel like "normal" is very fair to the AI since it can't load and save games. What I'd like to have at a slightly above normal AI is where it has FOW but once it knows about your ship it knows about it. This makes it dealing with pirates a lot easier without using tons of memory.
And here's another post about the AI from the Steam forums:
It pains me when people use the word "cheat" so loosely. In game AI circles, we would not actually count the AI as "cheating" except for the higher levels being able to see the map.
The AI would have been a lot easier to write if I could have just had it spawn units and prebuild a perfectly optimized planet (as in, just generate the planet with the perfect buildings there but disabled until the right time based on difficulty).
What the AI does get are amplifiers to its stats. This is an important distinction because it means when you destroy a shipyard or take a planet, you are really hurting it. It can't just spawn a unit in the FOW or something. If you've played a 4X in recent years, you've probably played one that actually does cheat.
Now, regarding being able to see the map. This is less about making the AI smarter and actually more about memory. It's actually not super awesome for the AI to see stuff because it ends up making a lot of dumb decisions. In fact, a lot of its strategic mistakes are tied to this issue.
During the beta, every AI stored their own FOW. The problem was that this consumered a lot of memory (as some beta testers can tell you, the betas used a lot more RAM). So we found ways to trim it. One of those things was to have a bit more binary FOW system. On normal and below, it has to "Scan" every turn to see what it knows or doesn't know. It's actually at a slight disadvantage to the human.
On higher levels, we try to simulate what it knows and doesn't know with us being increasingly generous to it.
Now, in 1.1 (June) we have an improved system so the AI won't know where everything is, even on the highest level because, like I said, knowing where everything is results in bad strategic choices (sending a fleet across a gigantic galaxy is not a good idea for instance).
Like all 4X AI, it all has to be refined over time.
One thing you guys can do is send me saved games with "stupid AI tricks". They're literally a gold mine. A lot of the reason the AI is as good as it is is because of those saved games players have sent.