An intelligence report circulated across the US military this spring, in the midst of the war with Iran, set off alarm bells. It said a Chinese ship in the Middle East was transporting components of a nuclear weapons program. The report was wrong, and artificial intelligence was to blame.
The US military swung into action with plans to intercept the vessel, according to four sources familiar with the episode. Two of the sources said armed members of the US military were preparing to board the ship. One of those sources and another source said military planes were in the air.
Only just before the planned operation did officials dig deeper into the report, which was put together by a special operations command analyst. They found it had been generated with the help of AI, and that a chatbot the analyst used had inaccurately identified the material the ship was carrying. CNN was not able to learn what the misidentified cargo was.
One source called the report “entirely false” but said it also “almost started a war.” Any US operation against a Chinese vessel could have risked spiraling into an armed conflict between the two nations.
The analyst had queried a chatbot about intelligence reporting on the ship’s manifest that originated with US Special Operations Command Pacific, based in Hawaii. It was not clear whether the chatbot was a commercially available one or a US government product. “The internal tools are mostly just copies of the commercial stuff wearing lipstick,” said a former senior US official familiar with the AI systems used by military and intelligence analysts. The bot fused open-source intelligence with secret signals intelligence in government holdings and reached its conclusion. The analyst then used AI again to package the findings into a standard intelligence report, the kind trusted by military officials, and sent it out. Special Operations Command Pacific and the Pentagon did not respond to a request for comment.
Across the military and the intelligence community, officials are pushing to weave AI into nearly every facet of their work, from analyzing raw intelligence and selecting targets for strikes to budgeting, logistics and supply chains. The rationale is that AI can help the military make battlefield decisions faster, and officials say the US can’t afford to fall behind if it must one day fight China or another adversary.
In January, Defense Secretary Pete Hegseth released the department’s “Artificial Intelligence Acceleration Strategy” to speed up the military’s use of AI. “We will unleash experimentation, eliminate bureaucratic barriers, focus our investments and demonstrate the execution approach needed to ensure we lead in military AI,” Hegseth said. A memo announcing the strategy said the aim is to put AI models directly in the hands of the department’s three million civilian and military personnel, at all classification levels.
But multiple US officials said the effort is decentralized, with different parts of the government using different tools under different orders and safety standards. There is no single set of standards for verifying the information these tools generate, so reliability varies widely.
Washington policymakers have spent weeks debating AI after dire warnings from Silicon Valley engineers and tech CEOs that it could break free of human constraints. The Chinese ship episode points to a more immediate risk: humans making disastrous decisions based on inaccurate information generated by AI. Sources said the military is rapidly turning to AI for targeting. “There is no real guidance for how having a human in the loop will prevent civilian casualties or fratricide,” one source said.
One source said this kind of “hallucination” has not been an isolated incident in the intelligence community. Some older officials, even those who broadly support AI, say it pressures analysts to produce intelligence faster, opening the door to mistakes. Young analysts, several sources said, are more likely to trust the tools uncritically. “AI allows you to get to a bad idea faster,” one source said.
