From the help file...
The important bit, how much you have left to buy toys with. Player No 2's points depend on what player No 1 spent, and are multiplied or reduced depending on the battle type, if Player 1 is assaulting and spent 2000 points, then Player 2 will have rather less than 2000 buy points when it is his turn to purchase.
Note, even if player 1 selected max points, but only spent 2000 of that, then that 2000 will be the basis of player two's point allocation and not the max points.
Exception, if player 2's points are not set to XXX in the preferences screen he will get the value set for player 2 in the preferences screen regardless of player 1's buy.
The AIs force is always dependent on the size of the players force. If you intentionally use a small force then the AI will have a small force as well. Scaled to the battle type Defend = larger, Assault = smaller, Meeting Engagement = similar. Unless you actually set Player 2s purchase points as it mentions.