the AI was not a priority in this game. on most tracks with most cars it is pretty slow, but some combinations can be much more competitive, especially the FBM (F1 training car). on the city track the AI sometimes can't make it through the course with some cars.
however lfs is very customizable, so you can do the following:
-create a field of various strength AI by making them use various engine restrictions. once you're done tweaking you can save the grid to be reloaded later. you can easily put yourself mid-pack to where you must race your best to make it to the front with proper engine restrictions (with you at -3% to -7% power about). even on my modest computer you can do a big field.
-upgrade the graphics. makes a big difference.
-with a particular older version of LFS you can actually modify the cars themselves with LFSTweak. this lets you do some fun stuff like change horsepower, recreate your own car (about). can not go online with modified car.
-you can create your own custom layouts (autocross). this is actually a pretty powerful tool that can be used on all the tracks and not just the autocross parking lot. many objects are there for you to place like you want, and the race timing works well, with and without penalties for hitting tires/cones.
one thing that wasn't mentioned was the setups. compared to the other games/sims I've used (iRacing, GP3, colin mcrae rallys) the car setup in LFS is pretty awesome. apart from static steering geometry and 1/1 motion ratio, it is a lot like setting up a real car. if you enjoy the challenge of tackling the engineering aspect of racing, you can have a lot of fun in LFS. you can really make a setup that responds to your own style of driving, and there is a lot of depth to the response the sim gives you to changes in setup.
I guess I am someone who takes more of a single player approach to LFS since most people are like "it sucks" or "it rocks". my best memories are definitely from online play when I ran into someone about my same pace. That didn't happen often though! I have my own brand of suck! hehe. I find it a lot more fun than iRacing though, where the multiplayer just left me feeling alone, like I was hotlapping with people around.
LFS feels more like a mosh pit when it really gets going.