The AI is currently being worked on. There are lots of issues with it, the fact that AI players' capital ships keep jumping between two adjecent owned gravity wells being one of it's most important failures. Also, the AI is not even able to move it's titans yet, which also needs to be addressed.
If you try the Cruel or Vicious difficulty you might have a bit of a better challenge at the moment, since with that massive income advantage the AI is still able to spem a good amount of frigates and cruisers to keep you busy with.