So you've got a 1000hp+ skyline and you've got the TCS jacked up so you don't spin out in corners, I'm guessing?
Ever thought of dropping that to 500HP and reducing your TCS so that you can take a corner without spinning, and manage to burn out? I'm betting that you can drop 400hp off that car, and still manage nearly the same lap times. Are you slaughtering the competition?
Just curious, but why do you think you need 1000+ hp? DO you have it just because you can?
So to answer your question, the AI are running considerably less HP, and they have their TCS lowered as well, thus enabling them to "burn out". They exercise a bit of throttle control when taking corners and I'm guessing give you a run for the money, with 1/2 the HP you are using.
AO