Parnelli Bone
Check it out...in the GT national race (the B license one) the Renault Clio races along. I entered a Honda Prelude Si with about 193 hp, and the Clio is keeping up! How is this possible if it's only got like 108 hp or something?
There's something about...Clio! If you race the Compact Car Cup events (~246hp for the first two, ~295hp limit on the last one), the cars that enter are either "high-end" (read: expensive) Kei cars, or a few European hot-hatches that make about 70-130hp. The Lupo, Logo, Clio, Y, 106 Rallye, and a few others take turns being the fastest cars in that series.
So I think the AI does boost one car over another, because a 70hp Lupo shouldn't be beating a 116hp Clio. Also, the AI doens't always drive very cleanly in a lot of the races (cars miss hairpin braking points, slide wide, brake too early), so sometimes is quite possible to have one slower AI-controlled car beat a certain faster AI-controlled car.
Adding power to all the AI cars was an experiment of mine, and it proved that the AI had little or no problem with most 4WD cars when you added, say, 500hp to them, but many MR cars couldn't handle it (except the GT40s, oddly), and the FR cars took turns spinning or oversteering wildly. (I never bothered this with FF cars, they probably would be understeering quite a bit with such a power boost.)