Having access to a large artificial supply of resources is what it does on any difficulty
I think this may be a contributing factor for some of the weird behaviour. With the current economy you can outstrip your food/mineral production with growth, so an AI empire could actually colonize a number of poor quality planets early with its Free Resources and come mid game these can't keep up with pop growth and demands but were propped up by the free stuff for so long it's pigeonholed into this planet layout just to survive.
They will also go bankrupt trying to stay competitive on the diplomacy screen since this is all the AI cares about, spending all their resources to get the necessary alloys just to exist without being declared war on but in doing so completely hamstringing their economic growth which then gets overwhelmed by growing populations. I think with the changes 2.2 brought it is time for a revamp of what difficulty scaling does, as flat resource boosts only get them so far before the exponential demand for food and consumer goods kicks them down. Maybe boosts to pop growth or market discounts.
They also put so much emphasis on being "equivalent" with their neighbours. If you are superior in Fleet, Economy, or Research, the AI will just ignore you because it assumes it will lose, which results in really boring gameplay when you have a good start and awfully unfair gameplay when you didn't start snowballing early enough or your AI neighbour did.
Far too many issues in this game arise from the fact the AI has perfect knowledge of everything that is going on at all times across the entire galaxy as well as their attitude being mostly based on your empire traits and not on whether you really are purging the slugs next door, or in control of a system they really want.
TLDR: AI is spending all it can just to survive with the new economy, and doesn't set the necessary groundwork to snowball that is essential for Stellaris as well as putting too much emphasis on diplomatic equivalency.
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