Assuming the faction AI is also trying to "win" the game and not just a passenger in the mix to trip the player up, I'd like to add an overarching priority for faction AIs to seek to meet their victory conditions: e.g. focus on prestige points or conquest of particular regions.
I'd rather factions didn't become lap-dogs, willing to do my every bidding and trade key techs or territories just because i had buttered them up. I'd prefer the factions to be as independant and strategically active as the player can be (within the boundaries of possibility of course).
I'd get rid of the overal "game" AI which has the tendency to trigger the suicidal DoW's form factions, only there to keep the player stretched. there should be a quid-pro-quo between inter-faction AI dealings, as much as there is between human and ai factions.
For that matter, I've never seen the factions make any alliances beyond those that they start with -the 1700's were full of incessant changes in the raports and alliance between countries -this should be reflected in the game.
I'd even (pause for effect) be happy with an ammount of scripted behaviour, which would dictate the various factions pursuing their own victory conditions, generating flashpoint regions & resources that would naturally engender conflict between factions.
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