Okay, I know this will absolutely freak some folks out and that's fine but Humankind seems to have the same problems with AIs fielding obsolete armies later in the game as most other 4X games have.

I would like to suggest that unit upgrades to the newest model is free and automatic in friendly territory as long as the resources are there to support it. This means that it will be much easier for AIs to stay competitive later in the game and not still be running around with medieval units or worse in the Industrial era they are currently in.

It's not without precedent. The only 4X game I can think of that did this was Civ Beyond Earth and the AI still remained a threat in the game because all their units automatically upgraded when their affinity levels increased. It felt weird at first but then once you became accustomed to it, you appreciated how important it was to keep up with the AIs. A Tier 2 unit could slaughter an equivalent Tier 1 unit and you had to respect that.

Er, no it's not based on any misunderstanding but thank you very much for the casual insult. That's just another (bad) issue with the game.