We should discuss then what exactly it is that makes them cheap, but not so cheap that clones aren't too much more expensive. It already has been stated that the Separatists used battle droids because they were cheap. Simply put: The battle droids AI is not smarter than the clones. I don't know enough about the deep lore, and especially what is still considered canon and what isn't, to give a definitive answer, but I will do my best based on reasonable assumptions and things that other people have mentioned in the comments. These AI would be directed and take orders from biological commanders, and thus would not need higher thoughts (if anything, wasting computing power on anything beyond direct combat would slow it down enough to make it lose against other AI that does not waste their CPU power).

And the argument that 'AI might turn on us' is not very good teaching an AI how to differentiate targets, predict trajectories, and manage weaponry/vehicles, will not teach it to think for itself enough to ever even be capable of considering rebellion.

If anything, I think that in any even slightly realistic world of space-farers, combat will always be done by AI since anyone not using AI would never ever keep up. I do know that much of the CIS droids are made to be as cheap as possible, but even with our own real-life tech we are already capable of self-steering cars that react faster and better than humans (and no matter how much the CIS save on production costs, there is no way they wouldn't at least develop a good AI since that's a one-time investment for billions of droids!) so how could the interstellar community have worse AI than we on Earth do? In particular this hits me during space battles a ship manually controlled by a clone (human) should not be able to keep up with an AI. A computer (AI) should always be able to react faster than a human (except perhaps in situations such as trying to figure out a social encounter, but battle is rather straightforward) and with half-decent sensors should have better senses than a clone too. And when it's produced it really shouldn't be more effective in combat situations, other than when it comes to leadership. It definitely costs far more to produce a clone (10 years of costly training) than to produce a droid. What I cannot understand is why they did this regardless of whether it's a military och economical point of view, they are almost always less effective. The Clone Wars are known as such because the Republic side fought with clones.

Clone wars space battle