What Version were you playing with? In the release (1.02) the AI could sometimes be dealt a 'Small' homeworld which is absolutely crippling, especially if you were on a Gas Giant and close to them.
Try it under the latest Version and with 'Hard' set for Difficulty. It wont play as well as a human most of time but it can do well in certain conditions.
Dont sell it short just yet!
Talenn