Ttyjukl

In the anime Gargantia on the Verdurous Planet, the Hideauze are the enemies of the Galactic Alliance of Humankind. We see them as biologic creatures with features derived from sea life.

Later in the series, we learn that the Hideauze

are actually a faction of humans who underwent extreme genetic manipulation, calling themselves "Evolvers". The Whalesquid on Earth are the less-modified ancestors of the Hideauze who stayed on Earth instead of escaping to the stars.

Are the Hideauze which the Galactic Alliance fight sentient (are their minds like ours), or are their minds at an animalistic, instinctual level? And...

are the Whalesquid still sentient?

Spoilers below, but if you already read the question, you know it.

Short version: Yes, they're sentient.

Long version:

Let's start with Wikipedia on Sentience so as to define our terms:

Sentience is the capacity to feel, perceive, or experience
subjectively. Eighteenth-century philosophers used the concept to
distinguish the ability to think (reason) from the ability to feel
(sentience).... sentience is necessary for the ability to suffer,...

We know that "Hideauze" and "Whalesquid" are the same; as Chamber states in episode 7:

Analysis of the biological sample is complete. Although the
composition of the exoskeleton has adapted to the environment, there
is no difference between the genetic makeup of this [Whalesquid] and
the Hideauze. Confirmed: They are identical species.

With that in mind, we don't know enough about the Hideauze to gauge their sentience. Our very limited exposure to them shows nothing more than them fighting after being attacked; we see nothing but aggression which might simply be reactive.

However, we have a couple incidents with the Whalesquid that give us more information. Following the incident where Ledo kills a Whalesquid, an enormous pod of Whalesquid approaches Gargantia only 30 meters deep, leading Ridget to say:

This can't be happening... I've never heard of a pod of them coming
up this close to the surface.

The implication is that this unprecedented pod of Whalesquid arose as a result of the disappearance or violent death of one of their members; that the result of Ledo's attack on one Whalesquid was enough to result in a distinct, organized response from Whalesquid who were not exposed to the direct provocation. That suggests that the Whalesquid are capable of subjectively perceiving or feeling above and beyond a mechanical defense mechanism.

The second indication that they're sentient is the correlation of the interaction of Elaine Matsumoto, following her conversion to Whalesquid as seen in the archives, with a diver in a tank - the body language of the two communicates mutual recognition and amiability.

This second example of sentient behavior is immediately followed by Ledo expressing his dismay at learning the shared origins of the Hideauze, the Whalesquid, and Humanity in episode 9:

I thought the Hideauze were a lower form of life!

[Adolescent Whalesquid which looks very like Elaine Matsumoto swims up and displays curiosity, tilts head, another indication of 'subjective perception']

[Chamber destroys Whalesquid]

[Ledo loses it.]

Ledo reaches a point of explicitly equating Humans and Hideauze in episode 10:

You saw them too, didn't you?! The newborn whalesquid forms... We're
of the same human race and we're killing each other!

Chamber argues that the Hideauze are more than human, which is why the two are locked into a war with no quarter:

The human race and the Hideauze will always have an antagonistic
relationship.

...

Hypothesis: Humans are beings that surpass their own limits, develop
their intellect, and build civilizations. The existence of
civilization is what separates the human race from all other primates.
But the Hideauze have thrown away their human forms and have no
physical limits. If living beings only seek out happiness and
gratification, it isn't necessary for them to have a higher intellect.
But the human race relies solely on Machine Calibers. That is to say,
we are the culmination of pure intellect, a product of civilization.
And by overcoming even that intellect, the Hideauze have reached an
extreme state of existence.

...

And so, you and I must battle, with the dignity of the human race at
stake. In a war with something that shares the same building blocks
as you, failure means certain extinction. One side seeks out
civilization. The other abandons it. The war between the Galactic
Alliance of Humankind and the Hideauze is a conflict between two
different strategies of survival, one in which being culled is all
that awaits the loser.

Arguably the Hideauze would have retained their Human sentience even as they evolved into bodies which negated their need for technology and civiilzation.