The AI insanely overvalues all their technology when it comes to diplomatic transactions. Or they insanely undervalue mine. 

Even with allies.

I can at least understand that a non-allied AI, and especially AI that I am not at Peace with, would value their technology somewhat higher than mine, especially Military tech. You don't want to give guns to the person who might turn around and shoot you with them. I can also understand a brand new Ally or a brand new Peace accord not wanting to immediately give up the goods.

But why do long time allies so horribly overvalue their technology? (or severely undervalue mine)

For example, a Sophon ally. We've been Allied for 20+ turns, I want to fill out some of the lower T2 tech that I skipped over from them. So, I queue it up one T2 tech on their side, and hit suggest terms to see what I am looking at, and they want multiple T3 techs, thousands of dust, dozens of Luxuries.  All for a single T2 Tech. Why?

Other times, I've been allied with someone for the bulk of the game, we are all in ~T4 military development, we are actively at War with 1 or more factions, and in order to trade (T3) Advanced Fusion Power for (T3) Hyperium Magnetics (either direction), my ally demands an absurd amount of tech and/or resources in compensation for what should be a pretty straight forward trade. We are allies. I am giving you guns in exchange for your guns. 

The Diplomacy of trading tech and stuff needs some serious work in how the AI values things. 

+1

+1 , I think it needs to be toned down aswell.

We need trust levels, higher trust less/equal value we get.

Yes

I think the AI overvaluing technologies is not a bug but just them not wanting to trade them.

They don't see them worth as much as they claim them to be but they just don't want you to have it unless you really make it worth it to them.

I prefer that to them just saying no but I would be good that they communicate that they didn't want to trade an item (perhaps have them highlighted in red?)

CyRob, the AI doesn't even want to trade low-level tech for hi-level. Nothing. Almost never. Might as well not have the option. And like others said, especially if you're in an alliance together, it is of mutual interest to trade stuff, and even then nothing...

CyRob - I addressed that. I can understand a non-ally placing a VERY high value on not trading me Military tech. And I can understand someone I am not allied with placing a higher value on their tech over mine.

But the percieved values by the AI is still completely bonkers. 

A faction I am at peace (non-allied) with, but do have a science agreement, have a trade agreement, we should be able to trade (non-military) tech at a roughly 1:1 ratio, especially in the same quadrant. 

A faction I am allied (20+ turns) with? We should be able and willing to swap tech on a pretty much 1:1 basis across all quadrants. Maybe their own political agenda could mean that, say, Sophons place a slightly higher value on Science-improving tech, or Horatio places a slightly higher value on Ecologist related tech, but my long standing ally should see "Advanced Fusion Power" and "Hyperium Magnetics" as equal values in a trade. 

In my mind, the way it should work:

Let's say each tech has a fixed "value" assigned to it. T1 techs are worth 10 points, T2 = 20, etc. Military techs are +10 points to the default across the board (T1 = 20, T2 = 30, etc) Certain techs, such as "Baryonic Shielding" (enables free travel) or "Autonomous Materials" (wormholes) should also be +10 point value. (NOTE: This is just a VERY rough framework, obviously this would need to be tweaked a lot, for example, I don't think something like "Vacuum Protection" (T3 S&E) is "worth" the same as "Neural Robotics" (T3 E&T), but I digress)

By default, other faction AI should severely overvalue tech, making it at best, very cost-ineffective, if not outright impossible, to trade tech. (Pretty much as it is now) So let's say that they value their tech at 200% of their "value", T1 Military tech is now "worth" 40 points, so you'd have to trade a T4 tech in order for them to give up a T1 Military tech.

For each turn at peace with each other, their percieved value of tech (and other goods) should diminish, an active science/trade/vision agreements should "boost" this decreasing value. Maybe it diminishes by 4% per turn (reg 300 turn game), so that is 50 turns of unbroken peace (No Science/Trade/Vision agreements) for them to value tech at 1:1. Tack on an extra -2% per agreement for a maximum of -10% per turn, meaning after 20 turns of unbroken peace with all three agreements active, then will value tech at about 1:1 (given their respective default values).

Being in an alliance automatically gives you the three agreements, so tack on an extra 5-10% on that per turn reduction (could be affected by things like, "not coming to allies defense" resulting in them having a "wounded" mood, could either reset to the default, or boost it back up by some fixed amount. 

So after 12-13 turns in an alliance, you should be able to trade pretty freely with your allies. Obviously they should still have their own wants and needs, this doesn't remove those, but still.

This would probably need some balancing to tweak the values of respective techs, the overvalue decrease speed, if different factions value things differently (Maybe Hissho always gives Military tech a 50% boost to its "value" or some such), but even a pretty basic framework like I detailed above would be so much better than the neurotic diplomacy trading AI we have now.

To be fair, if the AI didn't overvalue its own tech so highly, how easily would you roll over them due to the rapid advances that you'd make?  Getting ahead of the AI by more than a few techs can virtually guarantee your victory, especially if those techs are critical to your strategy in the first place.  It's well known that the AI doesn't macromanage all that well compared to even a moderately knowledgeable player; once their early game resource advantage peters out and you can stand on even relatively equal terms, most AI factions just don't have the programmed skill to stay challenging.  Even on endless difficulty the Cravers will fold relatively easily once you manage to take out even one of their big fleets.  If you manage to take out a key Unfallen system and split their vines, the AI just does not have an answer.  The examples go on, but the point is the same: once you catch up to the AI, you basically win.

How much easier would it be if they didn't jealously guard their technologies?

The AI needs work. That much is obvious. The Lumeris are constantly going out of their way to break peace (and lose their trade agreements with me) because their raggedy fleet of cardboard boxes with spitball guns is so totally a match for my Battleships covered in rail guns and actual armor. Frequently the AI either expands too fast and has an"Empire" of a dozen systems with 2-5 pop on all of them or they expand too slow and basically do nothing but hide in a corner with 3 systems for a hundred turns. And then declare war because... I dunno.

But trading tech, they get something usable in return. (They just need to, you know, actually use it)

AI always horrifically overvalue literally everything they have, especially at higher difficulties. Trading with them is like pulling teeth, and then going to Gamestop and being told those teeth can get you either two dollars cash or four dollars store credit.