I hate the term "AI" applied to games, since AI means so many things and usually implies something smart, "intelligent". But in reality, it is more like a "bot" or a "computer player". And the main goal is not to be super-smart, but to be plausible enough and provide an appropriate challenge to the human player.

There are some "fair" bots in games - like in my favorite turn-based Mechanized Assault and Exploration from the mid 90s. Computer players follow the same rules as the human ones - e.g., if something is not visible to the radar, the computer will not see it. The only "cheat" is the resource boost computer players can have on the higher difficulty settings, but it is totally optional. And as an experienced player, you always let the computer have it, since you want a challenge, and without that boost, it has no chance whatsoever.

For a lot of games it can be surprisingly easy to make an AI which beats the median player even when limited to just basic strategies, simply by not getting distracted by the gut feelings that humans have.

Even for more complex strategy games like say Starcraft II where that's not enough, there's this: https://en.wikipedia.org/wiki/AlphaStar_(software)