I don't know about the AI being harder or not on different unit sizes but the way of playing changes.

Cavalry becomes more important on smaller sizes because relatively speaking infantry units shrink more than cavalry units. A single unit of cavalry can do more damage on infantry than on default size
On larger sizes the infantry becomes more important because of the same reason as said above. Relatively speaking does the infantry unit grow more than the cavalry unit and the cav is thus less powerful against infantry.