Basically, allow AI players heroes get lots of higher tier items (tier 3+) so they become stronger.
Currently there is a problem with balancing, because of how AI works, their heroes are weak. Let's face it, they are terrible.
So, perhaps, it's better to give them high tier of gear?
To prevent farming, those "bonus items" should be Ghost items, meaning, they will NOT drop when you sell hero's corpse. It's purely to give AI the power.
BONUS: let AI rulers passively gain XP, so they don't fall back behind. Seeing AI ruler having level 4 when I have level 16 (by turn 60+ !) is kinda boring. The power creep for players made it too easy.