This is true. I have seen AI systems (not their main system) that have every planet either settled or partially settled (Y/R worlds) by turn 40 or so when I stumble across them while scouting. This is on hard level BTW.
Nothing quite like seeing a 7-8 planet system teeming with AI colonies to go "oh crap, maybe I need to rethink that invasion." Of course the question is how well can the AI handle settling all those red/yellow sub optimal gravity worlds, and I haven't played enough to check on that either.