On "Higher", they [= the A.I. players] do upgrades.
Yep. It's just one of the behaviours that the AI intelligence slider turns on and off depending on its value.
Are you certain that it happens 100% of the time?
Today, I played my third game, with the latest version of the full game (that I had just purchased), on the
highest difficulty level. I won. When I exited the game, the screen indicated that my
7 A.I. enemies had built
0 factory -- a
ll 7 of them! I then checked the options menu, and the slider was effectively set to the extreme right, at the highest level of A.I. "intelligence".
Bug?