OH, if you're talking state of the art, then it's literally years and years behind. I'm fairly sure Brad would agree with that too; he's been pretty clear that even an AI as good as GC2 DA is a best-case scenario, since it not only requires a near-unaffordable amount of effort, it also requires a lot of luck. If we're talking state-of-the-commercially-viable-art, then it depends.
The actual AI bit of the AI, the bit that makes decisions, is as good as almost any other game on the market; GC2 with expansions may be better, but not much else. The scripted part of the AI is primitive, not very detailed and not impressive at all; I can think of a dozen games off the top of my head that do it better, and most mods for most 4X games that are better, too.
Partially, this is just a matter of more scripting being included full stop. The lack of triggers means that the strategic AI will only run one of 5 scripts at any time; the actual 5 vary from a small pool, but not very much. The strategic AI in my mod, on the other hand, runs through about 25 scripts in any given game, from a much, much larger pool. More scripts = more different things the AI can attempt to do over a given number of turns.
The other part of the problem, however is the very small number of triggers. There's a lot of stuff that the scripted AI simply can't detect, and so the strategic AI cannot react to things. It can't gear-up it's war production in preparation for an attack, since it has no 'prepare for attack' trigger in the scripts - even though I'm fairly sure that such a trigger DOES exist for the AI part of the AI, as it moves ships and suchlike to the front (now).
Now, there is a performance cost to adding more scripts, but it's not very high. There is also a performance cost to exposing more stuff to the xml, as keeping it in C is much more efficient. This means that there are limits to what we can have in the way of triggers. However, there are presently only 5 for the strategies; this number can probably be comfortable doubled without any discernible performance impact. And having twice as many triggers means twice as many things that the AI can react to - it could be told to notice that it shares a border, for example, or that it is in war-preparation mode, or that it needs to react to someone else's military build-up and adjust it's production settings, or be told to concentrate more on research if it notices it's falling behind the tech leader, or if it's researching a particularly important tech. We might even be able to tell it how to build planets more sensibly, since it's present method of picking is terribly restricted and is leading to other problems.
The part of the AI which is top-notch is the bit which SD are quite proud of, and so they should be. Unfortunately, the scripted bit is the part that we are complaining about, because this is the bit which is making the AI fall apart in the mid-to-late game. A lot of work appears to be going into the 'fine' bit of the AI, which doesn't particularly need it; meanwhile, the amount of work going into the scripts appears pretty marginal (some re-balancing of obviously broken stuff but not any real development).