The AI can get pretty quick if you train it right. I have been doing experiments with the AI to see how far it will go. The will never set WR times, (but my FOX on the Oval is only off by .2x seconds) but can get better then the average LFS player.
The track does not seem to matter, camber, curbs, none of it. (except for south city) It seems the AI will keep trying small vartiations to its line to pick up time. The variations seem to random, and very small. It will also brake later and later, and get on the gas sooner and sooner. Also, it seems the AI will run faster lap times with setups that would be to loose for most peoples taste.
I left an AI for weeks on our server a while ago (EAGLE) on BL1, and after what must have bee hundreds of laps it was down to a 1:09.xx. Not super fast, but i beleive better then average.
That being siad, it is hard to train them, because they have no concept of fuel or tires, so you just can not fill up the tank and let it go out. It will not know that it is heavier, and has to brake sooner, so it will crash. so you need to keep it with low fuel levels.
The wiggle that the BF1 and F08 get at high speed seems to have something to do with force feedback. It get the same wiggles that you would normally have if you let go of the wheel at high speed. It seems it can not compensate for it. I have made special setups of the BF1 for the Oval (very soft in front) that give it the ability to go faster befor the wiggles start (almost 20mph).
If the AI knew about tire temp and fuel, and was able to pit. you could just let it run all day long without having to touch it. That would be cool to try.