In my opinion, the A.I. in the demo was fairly standard for what I've come to expect from your average Total War title, which is to say acceptable but by no means brilliant.

I have only had the chance to fight the major land battle once, but in that battle I did notice a few surprising moves made by the AI, such as using the woods to flank and ambush my forces and also sending a few infantry units the long rout (seeing as I opted not to cross where the enemy had been fortified) and they reached my rear while I was busy with the front.

So, in general I think we are seeing what we usually see with each release, namely steady and noticeable increases in the battle performance of the AI. As a result, I am fairly pleased, but I didn't go in expecting a miracle.