In the beginning there were the Dread Lords, and their ships were good, too Good.
They had ships that higly outclassed anything I could build. The counter was slow small ships in fleets that had weaponry that made the Dread Lord defenses have reduced efficiency. Each round the dread lords took a ship, and I took a bite. I would get the last bite
When I started playing against the AI players, they started with slow small ships. The counter was to build big hulled ships with just enough offense to down their small hulled ships at the rate of one per round. My ships cost twice as much as theirs, but had 3 times the speed and 4 times the hitpoints. I would bypass the fleets and hit home planets.
The AI countered by all declaring war at once so I didn't have time to heal my ships.between wars. My counter was to fill the left over hull space with defense. The ships were 3-4 times as expensive but could now fight 10 times more rounds before dying.
The AI countered by building bigger ships. I countered by tailoring my few ships to beat their entire fleet. They had no shields for my weapons and my shields countered their weapons.
The AI countered by tailoring its ships to my ships and parking them on planets without orbital defenses so that the optimal ship would always defend. I countered by diversifying my ship payloads and defenses.
The AI countered with small ships that could overwhelm the watered down defenses. and so the world turns.
It is extremely well balanced. The only reason folks feel there is a strategy that always works is that the AI is slow to react, and thus all of the above strategies work as long as you pick your fights to match your strategy. Interestingly, by amping up the AI's production capacity at Suicidal, I am actually reducing the AI's ability to react because it builds out its fleet to its spending limit, long before it knows the actual ships I am going to build. This is the Dread Lords true achilles heal. It is also why you must win wars quickly. If you fight a war of attrition, the AI is very adept at building well tailored new ships that replace the dead ones.