I have been running tests to see how or if the AI uses divisions. Here are my results.
Control: I gave the CSA AI 12 Free Divisions via events in August 1861. By September 1861 I saw the following results...
75% of the Divisional HQs had forces under their command, 25% were at 'full strength' as in viable combat forces. Given time, I expect that this rate will increase to 100%.
However, here's also what the AI did...
#1. Used a lot of militia. About 1/3 of Divisional troops were militia, even though regular troops remain in independent brigades.
#2. A very important issue, I have not seen the AI add a signle Divisional leader. It keeps their leaders outside of divisional command, even if they are Brigadiers.
#3. On its own, it builds very few commands. From 1861-January 1862 in another test the AI Built just two divisions, while I had 17 (including the 5 I started with).
The AI uses divisions, indeed are more effective when they have them. Also, they are more aggressive in the given timeframe. I noticed that formed into divisions, forces out West were way more aggressive, actually attacking my fortified towns (with varying levels of success) instead of 'stumbling'.
I suggest the following.
A) A greater importance for the AI to build Divisional HQs. They use them, even as is, and are way more effective when they do.
B) Get the AI to devote Brigadiers to Divisional Command. The unit is even more effective when given a brigadier in the division.
C) Have a priority of unit deployment to Divisions, with militia/volunteer at the bottom (if there are 3 Regular, 3 Militia, 3 Volunteers it uses all of the Regular first, then the Volunteer, then the Militia, presently it appears to be random).
D) The AI devotes units built to the frontiers that are nearest to them. This means all units built out East will fight out East. This is a major stumbling block out West, since units like HQs (only buildable at capitol cities) will always be deployed in the East and will never (or rarely) ever appear out west.
I have found giving the AI free divisions to help them a significant amount. If we get the AI to build divisions (and deploy commanders to them), the formidable AI will be even more of a challenge.