This is a fair question. I don't know, but I assume that an AI takes control of your Avatar. If this is the case I hope the AI is set to a player level equal to the lowest player level in relation to the current players. Even if the host set the AI to HARD, I think it would only be fair for the lowest ranking player to not be subjected to another Advanced AI.
I think the same should apply to games that allow the game to take control of their Avatar. I ha seen so many players use this to try and get an advantage over others.