It took them a whole 2.5 hours? That seems like it should become a competition, how fast can you beat ai 1/1's .
I think they had realized by that point what was up, but for the first while they were just really pleased with themselves.
This highlights a good point about game design and user experience.
An example.
I managed to play Elite for years while fooling myself that there were 'pirate bases' that relied upon pillaging to build their fleets and planets that needed medical supplies and an economy behind the trading and so forth, not because there was a lot in the game to support those impressions, but because there was nothing really to destroy the illusion.
I knew it was just my imagination and the game didn't do anything (intentionally or accidently) to spoil it.
Then came along similar games that really did try to have economies and supply mechanisms etc (like X2 or Supreme Ruler (not Supreme Commander) or I dunno a million of these type games) and the slightest little inconsistency spoils the whole illusion.
The asymmetrical AI concept (among other things) in AI War is an approach that really makes the experience work, and the above quote shows it.
Another similarity AI War bears to 'Enders Game', where his experience bears, shall we say, a similar relationship to the 'reality' (OSC seems to raise this theme a lot, to do with his issues about the subjective nature of morality and reality or something)
For this reason, changing 'AI Progress' to 'AI Alert' or 'AI Alarm' or even 'AI Disgruntlement' (kidding) would remove something that just doesn't sit right with the immersion for me.
Anyway, Back to the 'Game'...
dM