Second that one.

While the AI may not be as good as a human player, it's still the best out there for such a complex game.

The AI for games like AoE isn't really a tactical AI, it's more of a building AI. It simply churns out more troops and attacks more often with the increased difficulty settings. It doesn't really care for tactics beyond which troops to send and how often to attack.

The AI here really isn't comperable to the one of for example AoE. If you autocalc every battle, then you could compare it.

The difficulty of the game(which means the AI) is really the only thing I would improve if I was the Allmighty God of Software...

Oh, and if you get negative income(I'm assuming you're talking about your treasury, not individual city), then you should have a closer look on the financial tab, you'll find the answer there...