There was a whole thread on the subject of exploits, if anyone could figure out how to dig it out. Here are the ones I can think of:

1: the AI does not know how to exploit trade. So using it too much gives you an unfair cash advantage.
2: The AI cannot hire mercinaries. I only hire them if there is a cool unit I really want, and then I send it to my captiol as an honor guard unit and don't let it fight. Mercinaries can give you a huge unfair advantage.
3: The AI cannot disband troops or destroy buildings for profit, except it can destroy buildings when it takes a castle in the same way your troops do. It cannot intelligently eliminate buildings for cash later on
4: The AI cannot choose to dismount troops before battle
5: The AI can use inquisitors, crusades and jihads, but not nearly as well as a player can, so most veteran players use these items with restraint
6: The AI doesn't really have the hang of using weapon/armor upgrade buildings. I think it sometimes builds them if needed to get a particular troop type, but not simply to improve troops. Something like that. I don't really remember.
7: The AI cannot farm rebels (cause rebellions on purpose either to give generals and troops practice or for profit from confiscated estates)
8: The AI is not much good at getting a killer unit and spamming it. Some would say that you should train and use really fine units (like Janissaries, Varangian Guard, etc.) with restraint.
9: I don't think the AI can merge or retrain units.