Yeah, I’ve heard it’s ideal for practicing safe jump-ins: if you’re too late it will do a reversal and if you’re too early it throws you. As already mentioned, it’s great for polishing execution and it makes a half-decent combo dummy too.
Calling it “AI” is actually being too generous and probably technically a misnomer. My understanding is that it has a % chance to put out the most ideal counter to your move on the frame immediately after you’ve done something. It randomly throws out other stuff as well. Even though it’s not very feasible to precisely lock onto reliable and consistent loopholes and exploits, the computer’s actions are very condition-response with a bit of spontaneity and the occasional mistake thrown in for good measure. It also outright cheats from time to time, doing a few things that are literally (game system mechanic-wise and not physical difficulty of execution) impossible for a human to do. I read somewhere that Viscant, a very strong tournament player, says he usually can’t make it all the way through single-player in one credit (probably excluding Akuma).
Despite all of this however, the better a player you are, the better you will do against the computer. Even though it’s not the perfect learning tool, if you want to really start seeing dramatic improvement in your playing, geek out 100% and jot down notes of why you think you lost to the CPU each time you do, and what you think you should be doing to prevent this. Be sure to also note why you won when you do. Make them as brief or as long as you think your dignity can handle. Aside from learning basic tactics and counters and offense/defense matchup possibilities (which are the building blocks of strategy), you’ll also teach yourself situational perception and good, fast thinking (which are critical to being a good player). It won’t directly build good dynamic decision-making but you’ll indirectly begin to understand which choices would probably be good or bad against a real person.
Be sure to hide these nerd-notes from everyone else in your life if you care about having sex ever again, by the way; put them somewhere where, if you died overnight, nobody will ever find them and discover the horrible truth about how much of a loser you were. Sometimes I have nightmares about my family and friends passing mine around to each other at my funeral and laughing about them. “Hahah, and here’s a list of characters whose fireballs will pass under a hurricane kick! What a chump that guy was!!”
Truth is though–if your computer is less than four years old–you will improve faster and just plain have more fun on GGPO. (And of course snatch up any and every opportunity to play with others in-person!) Without other humans, you’ll never realize how useful good mixups are and never experience the joys of trying to outsmart another living, breathing person. Trying to think one step ahead of your opponent is when fighting games step above being a great passtime and become a full-blown, life-crippling addiction.