Does the AI actually use their navies aggressively? So far, I've seen them do the usual crap where they sail around and take pot-shots at their enemies, and sail around with invasion forces that never do anything.
Had a pretty interesting naval battle against Songhai last night (interesting enough that I actually kept playing after I'd finished Utopia). Started off with my little expeditionary force, consisting of 2 frigates & 2 privateers, going up against his entire Navy, right off his home shores (I was defending a city state ally across the map from my homeland). Whole battle lasted a solid 20 turns, and the privateers were the
only reason I won; I was able to get the first attack in and start leveling the playing field by capturing first one, then another frigate. He actually did a pretty decent job of focusing fire where he could, but the AI is still hampered by that flaw that doesn't allow them to move and bombard in the same turn; in the end, I lost 1 of my original privateers along with a couple ships I captured along the way, but managed to sink or capture pretty much his entire navy (at least 10 frigates/privateers, plus a couple caravels) and eventually take all 3 cities on his home island.
So yeah, privateers are pretty much essential if you're going to be fighting a naval battle on the other side of the map, and are still very useful for fighting defensively in home waters. And that's saying nothing of their ability to actually capture cities, with enough preparatory bombardment from supporting frigates. Yes, the AI still has some major combat kinks when it comes to fighting, on sea or land, but it is a bit more challenging and at least knows to lead with the ranged attackers & focus its fire now.
/It also knows to keep a reserve force handy to smack you with once you've broken the lead fleet.