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Nsanity said:

A lot of honesty in this video.

Yeah I tested the OP's video out and took the same car on the same track, put the AI on the hardest setting and I tried putting the car closer and farther away from that corner. When it was right up to the corner 1 car would consistently hit my car but if moved my car back about 15 feet I didn't have any problems.

 

Either way though Forza 4 AI sucks really bad.