Having been playing some Assetto Corsa (yes the original, I haven't bought ACC ... yet), it's put the spotlight on many of the problems that the GT Sport A.I have. Not just in how competitive they are against the player, but also in awareness and technique.
The A.I need a proper overhaul for GT7, quite frankly the way they behave currently is just sub par, especially for a racing game of this status.
For starters, the throttle and brake applications need to be much smoother than they currently are, especially around corners. I'm sure we've all had the unfortunate experience of watching an A.I slam the throttle and then brake trying to navigate the longer corners. Trying to follow these cars is near impossible without contact (which is important if you're interested in getting the clean race bonus), and trying to pass is equally as difficult since their pedal inputs create a load of unpredictability when it comes to their racing line. Certain cars really make this effect apparent, such as the pig that is the La Ferrari with its lack of downforce. Watch how the A.I attempts to drive the La Ferrari in any of the "La Festa Cavallino" events, its really quite the sight.
Next up is their awareness of where you are. Now they are kind of good at this most of the time, if I'm being generous. But the rest of the time, they will turn in as if you're not there, hit your quarter panels trying to return to the racing line, rear end you in braking zones (on the odd occasion that they've hit the brakes later than you) or, and yes this did happen to me, miss the braking point for T1 & 2 Monza entirely, swerve off course, then attempt to return to the track by cutting the chicane entirely and T-boning me perpendicular to the direction of the track, square in the passenger door. I've also recently had the experience of being aggressively side swiped before a braking zone by a La Ferrari who had a massive speed advantage over my 388 GTO. For context, I was driving in a straight line, La Ferrari flies past hunting the racing line, and in the process slamming into the side of my car whilst continuing to fly past. I was lucky to be able to stay on track, but that was really something I would expect to experience in an online lobby.
Finally, their aggressiveness. This should be adjustable on a sliding scale. Some of the custom races, you'll see A.I use their indicator and move over to let you past even if it is for position. Most GT League races they don't perform any defensive manoeuvres apart from their ridiculous driving style, and they won't bother trying to pass unless the road ahead is dead straight. Having a sliding scale will allow people to set the A.I to behave how they like. I've seen some of the replies here suggest they aren't interested in A.I that actively defend and attack, so they can set the aggressiveness lower down on the scale. Anyone who wants more competitive racing can set the scale accordingly, and if you want the A.I to go crazy you can set the scale as aggressive as possible.
When you see the quality of the A.I in other racing games, it really begs the question, why are the GT Sport A.I so rubbish? It's like they haven't updated the A.I behaviour since GT3. If anything GT Sport is a step backwards compared to GT5 & GT6. Atleast the A.I there didn't alternate between max power and max brakes mid corner in those games.