A U.S. military operation to board a Chinese ship was already underway this spring, with armed personnel preparing to intercept and military aircraft in the air, before officials discovered the intelligence driving the mission had been hallucinated by an AI chatbot2,5.
The false intelligence report, circulated across U.S. military channels during the war with Iran, claimed a Chinese vessel in the Middle East was transporting components for a nuclear weapons program3. One source familiar with the episode told CNN the report was "entirely false" and that it "almost started a war"1. Any U.S. operation against a Chinese vessel could have risked spiraling into armed conflict between the two nations.
How the hallucination traveled
The false intelligence originated with a U.S. Special Operations Command analyst who queried an AI chatbot to synthesize open-source data with classified signals intelligence. The chatbot misidentified the ship's cargo manifest. The analyst then used the tool a second time to format the erroneous findings into an official-looking intelligence summary, which was disseminated across command channels.
The operation was aborted only after officials dug deeper into the report and found it had been generated with AI assistance. ANALYSIS CNN reported it was not clear whether the chatbot was commercially available or a U.S. government product.
No unified standards
The near-miss arrives as the Pentagon accelerates AI integration across its operations. In January, Defense Secretary Pete Hegseth released the Pentagon's "Artificial Intelligence Acceleration Strategy," which aims to put AI models "directly in the hands of its three million civilian and military personnel, at all classification levels". Sources told CNN the military is rapidly turning to AI to help with targeting.
But the military and intelligence community are using different AI tools under different orders and safety standards, and there is no single set of standards for how the U.S. verifies information generated by these tools. One source said AI in targeting "is ramping up and there is no real guidance for how having a human in the loop will prevent civilian casualties or fratricide".
The hallucination was not an isolated incident across the intelligence community since AI tools began proliferating across government, according to CNN's sources. Sources also noted that AI has put pressure on analysts to produce and disseminate intelligence faster, opening the door for mistakes, and that younger analysts are more likely to trust AI tools uncritically.
ANALYSIS The episode exposes a concrete gap between the Pentagon's push to speed up its decision cycle with AI and the verification infrastructure needed to catch AI-generated errors before they reach operational commanders. The same acceleration the military prizes compressed the window in which a fabricated cargo manifest could be caught, and in this case nearly was not.