The problem is that the AI brakes too much and too long before the corner. It really could need to be improved at the braking technique. It`s overall o.k now, but if it has brakes a little less, and driven a little faster in the corners it would be awesome.
Make sure you have the option enabled "AI use same setup" (or something similar). Also try disabled as well, might be an improvement..
But AI "learn" the track. They do this through practise. Set a 100 lap race with 10 AI, and then just pit, and let them race... Grab a coffee, go see a movie, go to sleep. When you come back they should be considerably faster.
AI do not seem to learn any more since patch Y (.knw files are no more updated after AI races)
However AIs are VERY consistent, just try a 20 laps race with them and see if you can keep up!
first, they teach you to overtake them with proper lines 'cos they dont
give a d#$% (in fact now after changes they go wide too easily)
second, now they're more cautious so when you appear in front their nose they just stop with inner command "traffic ahead-possible collision-STOOOP!"
And as VeryEnd said: when you can overtake PRO AIs at every corner you are ready to go online And I would like it to be first notice for newbees.