I have to thank the AI for saving my butt in my latest game. A brief summary below.
Difficulty: Tough, AIs: 4 (Arcean, Drengin, Thalan, Altarian), Galaxy Size: Medium, Stars/Planets/Inhabitable: Abundant, Anomalies: Rare, Tech: Normal, Tech Trading: On, Special Victory Conditions: Alliance.
Opening position and planets after the rush: I started in the top corner, the Thalans and Arceans in the bottom left and right respectively. The Altairians started to my lower left, and the Drengin started solidly in the middle left. I expanded across the top right edge, with a tendril of worlds moving towards the middle. The Altairians were isolated with only 5 worlds, one cut off from them through my tendril. The Drengin grabbed the left, the Thalans and Arceans went and took a few worlds in the middle, but mostly the left and right quarters of the map.
Strategies: I went with my usual "Gain tech advantage, bribe AI off with mid-level techs, research weapons/ships. The Thalans with "Overwhelming numbers of mid-level ships". The Arceans with, well, something pretty militaristic, but they only had 2/3 of the Thalan's strength. The Altairians apparently went with a diplomatic route. The Drengin, well, you'll see.
Lead up: The Thalans attacked the Drengin early on and curbstomped them. The Drengin surrendered to the Thalans, and made the Thalans THE premier power in the galaxy. My technology at that point allowed my economy and technology to tie, and sometimes surpass them, but my industry lacked. I decided to do something about that my wiping the Altairians off the map. I took all of their planets except Wisp and the PQ 7 in the middle of the map. I was out of transports, and had slightly more than a dozen ships. Then the Thalans attacked me.
Doom: I'd picked up the Eyes of the Galaxy so I had a pretty good idea about the galaxy's state, but my recent war, and the Thalan/Drengin war had devastated my trade routes (Apparently when someone surrendors to someone else it creates to much risk to keep trading, ugh). I checked what I could see, and saw my doom. There were over 40 Thalan ships on their border, and more in their territory (that I couldn't see). 3 (or 2) of my ships could destroy 3 of theirs, but they could replenish their losses. I made peace with the (devastated) Altairians, and ran my ships to my middle-of-the-map planet. It was my best industrial world, I COULDN'T lose it. My ships went like heroes. Fleet after fleet of the Thalan's best went down, even their 2 Medium, 1 Large hull fleets fell, but I was running out of ships. And everyone else had better factories, I was just upgrading to Industrial Sectors when they had them. My best efforts to make more ships had let me have a grand total of 8 when the unthinkable happened.
Help: The Altairians declared war on the Thalans. The Altarians. With maybe 3 escorts scattered everywhere and as many unarmed starbases they attacked the biggest power in the galaxy. And apparently on the behalf of the species that had just tried to wipe them out. I'd asked the Arceans for help before, and they had laughed me off the connection, but they decided to consider attacking the Thalans now. It cost me 11 mid and high level technologies, but they intervened. The Arcean's forces were not enough to turn the tide, but the time they bought me to research defenses and weapons (not to mention upgrade my worlds) was enough. The Thalans were pushed back.
Endgame: The Thalans were wiped from the galaxy by a combined force of consisting of my battleships (Large Hull, much defense), and Arcean frigates. After that, I took the time to butter everyone up and ally. The Altairians were forever my friends in that sector ever after, despite flareups in other parts of the galaxy.
Conclusions: The Altairians attacking somehow convinced the Arcean AI that victory was possible, and the Altairians wouldn't have intervened without that Battle of Britain style AI algorithm that you cooked up. An AI acting like the race personality blurb says it will is a rare thing, and I realize that it took a long time to get it this way, so thanks. It's great. I'm going to go play another game now and enjoy the AI some more.