The AI is looking like being one of the more realistic interpretations of racing drivers we've yet seen. They'll look for any opportunity to overtake, but it's their defensive racing that really raises the bar. If they sense you're close enough to overtake, they'll move to the inside of any potential overtaking zone, sacrificing their speed through the corner, but keeping ahead.
They'll also move like this within corners, and while we haven't had enough time with the game to judge the AI conslusively, we're impressed with what we've seen so far.
Above: Beautiful women and Ferraris go together like... Bert and Ernie