Wikipedia says it exactly like I want to:
"Cheating AI
Cheating AI is a term used to describe the situation where the AI has regularly impossible advantages over the player(s), including faster, stronger, or more damaging attributes. It is typically used in games to artificially increase the difficulty of the game, because humans generally use more intelligent strategies than the AI, and could defeat it much more easily if it were not for these advantages. Cheating AI is a unique form of rubberband AI, in that in such situations the computer ignores certain boundaries that player(s) must abide by to give itself an advantage.
A common example of this is found in many racing games. The computer-controlled cars will, in most cases, already have upgraded attributes well before the player. AI cars may also respawn quicker (in most car-combat games), or have significantly better powerups unavailable to the player. Alternatively, in real-time strategy games such as the Command & Conquer series, the AI is able to gather resources and/or build weapons faster than the human player, allowing it to field a large army before its opponent has even finished building his/her base.
Critics claim that using this technique discourages developers from programming more human-like bots, giving them the easy alternative of letting the AI cheat. However, cheating AI may also be implemented as a player-selectable option, to increase the level of challenge, and thus increase the longevity of the game, once the player has exhausted the limits of the AI's base ability."
We all hope that the devs will make the AI increasingly smarter so that we can tone down the insane amout of potions they need to pop to survive.
