I'm allowing this thread for discussion on how to handle the A.I. in MAX difficulty. As we all know, it's either easy or hard (or very hard) depending on the player, but there are ways to handle it if you're patient enough, and focused. I'll start with this:

If the A.I. is circling around you, go for a sweep attack, then quickly block. If the A.I. Blocks, they'll likely try to attack with a combo.

If they're coming right at you straight on, do a quick attack, and quickly block, as again, the A.I. will likely try to attack with a combo.

Like I said, it takes patience and knowledge of when the combo will stop. Also be knowledgeable of characters with combos that have one hit that hits low (Rayden's staff for example), and block low on that hit.

With Kung Lao, as they finish the combo, retaliate with:

1,1,1,CS,4,4,CS,B+3,D,B+4

Now, it can get pretty easy here. As the A.I. lands, throw his hat (B,F + 1). If they block, there's a chance that they'll jump at you (they'll be too far to hit you). Just before they hit the ground, do D,B + 4 again. Try to make it so that all 3 hits connect. Then, throw the hat again, and see if they again jump. Then you can probably just repeat this sequence of hat throw, A.I. Jump, Whirlwind Kick patter until you win. You can also throw the hat at any time to do this, granted you have some good distance from the A.I.

With Moloch, it's very easy, just time your attacks right. Do any combo, then very quickly dodge back (B,B quickly) and Block. Do this, and you have the chance that you will be out of Moloch's grabbing range. He can still swing his ball at you. Be extremely careful when approaching him as he can still swing his ball quickly. Try to make him miss the swing, and then combo him again, and repeat. If you need to change styles after the combo, do it as you're dodging back after the combo.