So I have played quite a few games at the hardest setting, and I have noticed something that keeps occurring.  The AI can win in just about every section on the statistics including being 2-3 times ahead of you on the military stat, yet I will still walk over the AI's fleets like they are made of tissue paper.  I think I have figured out why that is.  The AI currently massively undervalues capacity reductions, and mass reductions.  It hardly every takes them over the production reduction, or other competing bonuses like maybe targeting or some such.  The end result by mid game if we both have a medium ship, mine probably has double the weapons and armor compared to the AIs. 

I initially didn't pay much attention as I figured that the initial ship designs are just bad and the AI is supposed to adopt your designs as you play.  This I believe was the hope.  However if most of my designs are based on capacity increases and mass reductions, the AI can not use my designs, as it doesn't take those techs.  As it doesn't take those techs it can not compete with me.  This is primarily due to the Logistic system, assuming we both have 20 logistics, even if the AI produces double my ships, if each ship of mine is twice as strong and we can only have 1 fleet vs 1 fleet capped at 20 logistics, I will easily win both engagements.

I have actually had to resort to giving the AI mass reduction and capacity increase techs just for the game to be somewhat challenging.  I would really like to see some tweaks done so that the AI prioritized mass reduction/ capacity increase techs.  It doesn't have to always do it, but seems like the AI should occasionally choose the path as it is very strong, it certainly wrecks their production path that they currently ALWAYS take.