Intelligentized War

China’s Military AI Modernization and the Taiwan Flashpoint

Illustration by Connor JL Moore

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Key Takeaway

ASSESSMENT: The People’s Republic of China is integrating artificial intelligence (AI) and cyber capabilities into its weapons systems and command, control, and intelligence networks. Through Military-Civil Fusion (MCF), China aims to accelerate decision-making, improve precision targeting, and challenge the United States' capabilities. Although we lack information on China’s potential deadline for an attack on Taiwan, we expect China’s AI-military and cyber developments to increase its readiness and willingness to do so, given that Taiwan’s ‘reunification’ is considered one of its “core interests.”¹² 

U.S. and allied defense operations in a Taiwan contingency will likely face AI-enhanced combat capabilities across all warfare domains, posing increased risks of Chinese systems targeting U.S. and allied critical infrastructure. 

Key Judgment 1: Through its state-led MCF strategy, China is pursuing next-generation combat capabilities. This strategy is grounded in its vision of future conflict called “intelligentized warfare,” defined by the expanded use of AI, quantum computing, and other advanced technologies at every level of warfare.³

Key Judgment 2: China’s AI-military fusion and cyber enhancements are very likely aimed at achieving tactical advantages. Precision-guided weapons, autonomous systems, complex military simulations, and information operations are designed to undermine U.S. and allied resolve in a Taiwan contingency.⁴

Key Judgment 3: If Beijing believes that conflict with Washington is imminent, China is likely to consider aggressive cyber operations against U.S. and allied domestic critical infrastructure.⁵ Recent Chinese state-backed cyberattack campaigns demonstrate Beijing’s capabilities to compromise critical sectors, including communications, energy, and transportation. These capabilities would likely impede decision-making and interfere with the movement of U.S. and allied forces.⁶

China is prioritizing the integration of AI and cyber capabilities as central components of its military modernization through its MCF strategy. These efforts aim to secure tactical and information superiority in a Taiwan contingency and undermine the operational effectiveness of U.S. and allied forces.⁷ By fostering stronger ties and promoting competition between the civilian and defense sectors, MCF facilitates technology transfer, diversifies its domestic supply base, and reduces barriers for private firms to compete for defense contracts.⁸ Since China does not renounce the use of force to achieve ‘reunification’ with Taiwan, it likely assesses that its MCF strategy will drive the integration of AI into its military to build an “intelligentized” force equipped with high-tech weapons, advanced communications, and information technologies.⁹ This scenario would likely degrade U.S. and allied military superiority.

• China’s official defense budget reached nearly $247 billion in 2025, which is five times as much on defense as Japan and nearly seven times as much as South Korea—key regional competitors and U.S. allies.¹⁰ As Taiwan remains Beijing’s top strategic priority, this defense spending¹¹ indicates China’s focus on achieving regional dominance.¹²

• Procurement data from 2023-2024 shows that nontraditional vendors (NTVs)—firms without state ownership ties—have won an increasing monetary share of AI-related contracts in China’s defense industrial base.¹³

• Most of the 1,560 state-owned enterprises (SOEs), NTVs, and research institutes assessed from 2023-2024 supplying AI and cyber-related capabilities¹⁴ to the PLA are not subject to U.S. sanctions or trade restrictions.¹⁵

China integrates AI into its command, control, and intelligence networks to gain tactical advantages. Their inclusion of autonomous systems in military and information operations aims to maximize superiority for faster operational planning, further reducing U.S. and allied reaction time in a Taiwan conflict.¹⁶ China very likely seeks to use AI to enhance the lethality and reach of its surface ships and to deny its enemies access to critical locations.¹⁷ By building a wide array of AI-enabled military capabilities across air, ground, and sea operations, China is strengthening its already robust ability to conduct complex naval operations around Taiwan, coordinate multi-domain strikes, and transport forces across the Taiwan Strait.¹⁸

• As early as 2016, a director at the China Aerospace Science and Industry Corporation¹⁹ claimed that the company’s next generation of cruise missiles would use AI to adapt to specific combat conditions, such as adjusting flight profiles and warhead yields.²⁰ 

• At the Zhuhai Airshow in November 2024, Chinese defense manufacturer Norinco revealed a combat system called “AI-Enabled Synthetic Brigade,” which combines advanced armored vehicles, swarming drones, loitering munitions, and electronic warfare tools into one unit.²¹

• In May 2025, a report published by a university in northwest China showed that the PLA used a DeepSeek AI model to generate 10,000 military simulation scenarios in 48 seconds for the purpose of assessing how commanders make decisions in battle.²² 

• AI systems, such as the intelligence-assessment chatbot “ChatBIT,” are being utilized by PLA-affiliated researchers to sort through massive amounts of data for strategic insights, suggesting experimentation with AI in intelligence gathering.²³

China’s AI-integrated cyber operations aim to compromise U.S. and allied critical infrastructure, as well as collect sensitive intelligence to impede military logistics during a Taiwan contingency. Beijing is almost certainly integrating AI into its cyberattack operations to adapt malware, enhance espionage, and conduct malign influence operations.²⁴ With the advanced rate of AI-military integration, the PLA can potentially scale critical infrastructure disruptions more quickly and efficiently than ever before.²⁵ Top Chinese leaders almost certainly view such cyber operations as critical for ‘reunification’ with Taiwan, as well as affecting an adversary’s political system, economy, and civilian critical infrastructure.²⁶ China remains the most active and persistent cyber threat to U.S. national security. In a Taiwan conflict scenario, the likelihood of an AI-integrated Chinese military seeking to destabilize the domestic affairs of the U.S. and its allies is expected to increase as Beijing pursues technological dominance.²⁷

• In January 2025, Volt Typhoon, a Chinese state-backed hacker group, targeted and gained control of hundreds of internet routers in the U.S. to serve as launch pads for critical infrastructure cyberattacks.²⁸

• Salt Typhoon, a Chinese state-backed hacker group, breached at least nine U.S. telecommunications networks and providers as of 2024, demonstrating China’s capability and intent to conduct more advanced cyberespionage operations.²⁹

• A Chinese state-sponsored cyberattack on the U.S. Treasury Department in December 2024 marked an escalation in Beijing’s use of hybrid tactics to test its offensive cyberattack capabilities and undermine its strategic competitors. The operation also sought to gather sensitive intelligence and prepare for future potential conflict.³⁰

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Policy Options

To develop and deploy its AI-enhanced military assets and offensive cyber capabilities against the U.S. and allies, China depends on internet infrastructure (e.g., undersea cables, telecommunications networks, internet exchange points, data centers, and cloud service providers).³¹ Further, China has long relied on Western cloud-based AI training models, semiconductor technology, and advanced computing power, exposing China’s dependence on foreign technology.³² While China probably benefits from its MCF strategy, it also allows for public bidding on a portion of its defense contracts, including for sensitive systems.³³

• Allied coordination in the Indo-Pacific on AI threat intelligence has shown promise but remains uneven in scope, consistency, and resilience.³⁴ Chinese AI-enhanced cyberattacks and military capabilities would likely struggle to overcome shared threat intelligence networks and stricter cybersecurity standards, as these enhance collective situational awareness and create a more resilient regional defense posture against Chinese AI use.³⁵

• Despite limited information on China’s defense contracts, the existing paper trail is likely sufficient to gain insight into AI-critical Chinese economic sectors and supply chains for targeted export controls.³⁶ China may immediately double down on its MCF strategy for AI-military development, but this probably impairs China’s ability to maintain competitive, long-term progress towards “intelligentized warfare” and train the most powerful AI-military models.³⁷ 

Caden Scates is a current master’s candidate for International Security at the University of Denver’s Josef Korbel School of Global and Public Affairs. 

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Endnotes

1.  Cole McFaul, Sam Bresnick, and Daniel Chou, “Pulling Back the Curtain on China’s Military-Civil Fusion: Howthe PLA Mobilizes Civilian AI for Strategic Advantage” (Center for Security and Emerging Technology, September2025), 4, https://doi.org/10.51593/20240030.; Jiayu Zhang, “China’s Military Employment of Artificial Intelligenceand Its Security Implications,” The International Affairs Review, August 16, 2020, https://www.iar-gwu.org/print-archive/blog-post-title-four-xgtap.   

2.  “White Paper: The Taiwan Question and China’s Reunification in the New Era_Embassy of the People’s Republic of China in the United States of America,” n.d., https://us.china-embassy.gov.cn/eng/zgyw/202208/t20220810_10740168.htm#:~:text=The%20Constitution%20of%20the%20People's,brook%20no%20violation%20or%20separation.; Department of Defense, “Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China,” Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China, 2024, 4, https://media.defense.gov/2024/Dec/18/2003615520/-1/-1/0/MILITARY-AND-SECURITY-DEVELOPMENTS-INVOLVING-THE-PEOPLES-REPUBLIC-OF-CHINA-2024.PDF.

3.  Department of Defense, “Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China,” Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China, 2024, VIII–IX, https://media.defense.gov/2024/Dec/18/2003615520/-1/-1/0/MILITARY-AND-SECURITY-DEVELOPMENTS-INVOLVING-THE-PEOPLES-REPUBLIC-OF-CHINA-2024.PDF. 

4.  Department of Defense, “Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China,” Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China, 2024, 93–96, https://media.defense.gov/2024/Dec/18/2003615520/-1/-1/0/MILITARY-AND-SECURITY-DEVELOPMENTS-INVOLVING-THE-PEOPLES-REPUBLIC-OF-CHINA-2024.PDF. 

5.  Office of the Director of National Intelligence, “Annual Threat Assessment of the U.S. Intelligence Community,” 2025, 12.

6.  Office of the Director of National Intelligence, “Annual Threat Assessment of the U.S. Intelligence Community,” 2025, 11.

7.  Department of Defense, “Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China,” Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China, 2024, 124-125, https://media.defense.gov/2024/Dec/18/2003615520/-1/-1/0/MILITARY-AND-SECURITY-DEVELOPMENTS-INVOLVING-THE-PEOPLES-REPUBLIC-OF-CHINA-2024.PDF.

8.  Cole McFaul, Sam Bresnick, and Daniel Chou, “Pulling Back the Curtain on China’s Military-Civil Fusion: How the PLA Mobilizes Civilian AI for Strategic Advantage” (Center for Security and Emerging Technology, September 2025), 5, https://doi.org/10.51593/20240030.

9.  Michael S. Chase and William Marcellino, “Incentives for U.S.-China Conflict, Competition, and Cooperation Across Artificial General Intelligence’s Five Hard National Security Problems,” RANDas much as, August 4, 2025, https://www.rand.org/pubs/perspectives/PEA4189-1.html.; Office of the Director of National Intelligence, “Annual Threat Assessment of the U.S. Intelligence Community,” 2025, 13.; Cole McFaul, Sam Bresnick, and Daniel Chou, “Pulling Back the Curtain on China’s Military-Civil Fusion: How the PLA Mobilizes Civilian AI for Strategic Advantage” (Center for Security and Emerging Technology, September 2025), 5, https://doi.org/10.51593/20240030.; “White Paper: The Taiwan Question and China’s Reunification in the New Era_Embassy of the People’s Republic of China in the United States of America,” n.d., https://us.china-embassy.gov.cn/eng/zgyw/202208/t20220810_10740168.htm#:~:text=The%20Constitution%20of%20the%20People's,brook%20no%20violation%20or%20separation.

10.  Matthew P. Funaiole and Brian Hart, “China’s Military in 10 Charts,” Center for Strategic and International Studies, September 2, 2025, https://www.csis.org/analysis/chinas-military-10-charts.

11.  If China maintains current trends, its defense spending is expected to increase at an annual rate of about 6%. 

12.  Matthew P. Funaiole and Brian Hart, “China’s Military in 10 Charts,” Center for Strategic and International Studies, September 2, 2025, https://www.csis.org/analysis/chinas-military-10-charts. 

13.  Cole McFaul, Sam Bresnick, and Daniel Chou, “Pulling Back the Curtain on China’s Military-Civil Fusion: How the PLA Mobilizes Civilian AI for Strategic Advantage” (Center for Security and Emerging Technology, September 2025), 21, https://doi.org/10.51593/20240030.

14.  These AI and cyber capabilities include: natural language processing, remote sensing, target recognition, and aerospace. 

15.  Cole McFaul, Sam Bresnick, and Daniel Chou, “Pulling Back the Curtain on China’s Military-Civil Fusion: How the PLA Mobilizes Civilian AI for Strategic Advantage” (Center for Security and Emerging Technology, September 2025), 22-33, https://doi.org/10.51593/20240030.

16.  Department of Defense, “Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China,” Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China, 2024, 124–27, https://media.defense.gov/2024/Dec/18/2003615520/-1/-1/0/MILITARY-AND-SECURITY-DEVELOPMENTS-INVOLVING-THE-PEOPLES-REPUBLIC-OF-CHINA-2024.PDF. 

17.  Alex Stephenson et al., “How AI Would — and Wouldn’t — Factor Into a U.S.-Chinese War,” War on the Rocks, May 3, 2022, https://warontherocks.com/2022/05/how-ai-would-and-wouldnt-factor-into-a-u-s-chinese-war/. 

18.  Eric Rosenbach et al., The Autonomous Arsenal in Defense of Taiwan (Belfer Center for Science and International Affairs, 2025), 22, https://www.belfercenter.org/sites/default/files/2025-02/DETS_The%20Autonomous%20Arsenal_1.pdf. 

19.  China Aerospace Science and Industry Corporation is a key Chinese aerospace and defense SOE.

20.  Alex Stephenson et al., “How AI Would — and Wouldn’t — Factor Into a U.S.-Chinese War,” War on the Rocks, May 3, 2022, https://warontherocks.com/2022/05/how-ai-would-and-wouldnt-factor-into-a-u-s-chinese-war/. 

21.  Davud Sablak and U.S. Army, “Where Does the Cyber Arms Race Lead to in the Age of Artificial Intelligence?,” www.army.mil, September 30, 2025, https://www.army.mil/article/288851/where_does_the_cyber_arms_race_lead_to_in_the_age_of_artificial_intelligence. 

22.  Davud Sablak and U.S. Army, “Where Does the Cyber Arms Race Lead to in the Age of Artificial Intelligence?,” www.army.mil, September 30, 2025, https://www.army.mil/article/288851/where_does_the_cyber_arms_race_lead_to_in_the_age_of_artificial_intelligence. 

23.  Abdullah Kazim, “The Role of AI in Shaping US-China Diplomacy: A Case Study of the Taiwan Strait Crisis,” Journal of Regional Studies Review 4, no. 1 (March 30, 2025): 438, https://doi.org/10.62843/jrsr/2025.4a090. 

24.  Julian E. Barnes, “China Turns to A.I. in Information Warfare,” The New York Times, August 6, 2025, https://www.nytimes.com/2025/08/06/us/politics/china-artificial-intelligence-information-warfare.html.

25.  Julian E. Barnes, “China Turns to A.I. in Information Warfare,” The New York Times, August 6, 2025, https://www.nytimes.com/2025/08/06/us/politics/china-artificial-intelligence-information-warfare.html. 

26.  Benjamin Jensen, Erica Lonergan, and Kathleen McInnis, “Securing Cyber and Space: How the United States CanDisrupt China’s Blockade Plans,” Center for Strategic and International Studies, March 28, 2025,https://www.csis.org/analysis/securing-cyber-and-space-how-united-states-can-disrupt-chinas-blockade-plans.

27.  Office of the Director of National Intelligence, “Annual Threat Assessment of the U.S. Intelligence Community,” 2025, 11. 

28.  U.S. Department of Justice, “U.S. Government Disrupts Botnet People’s Republic of China Used to Conceal Hacking of Critical Infrastructure,” January 31, 2024, https://www.justice.gov/archives/opa/pr/us-government-disrupts-botnet-peoples-republic-china-used-conceal-hacking-critical#:~:text=%E2%80%9CChina's%20hackers%20are%20targeting%20American,we%20see%20them%20threaten%20Americans.%E2%80%9D.

29.  Gaby Tejeda, “China Strategically Infiltrates U.S. Critical Infrastructure as Cyberattacks Escalate,” The Soufan Center, January 10, 2025, https://thesoufancenter.org/intelbrief-2025-january-10/. 

30.  Gaby Tejeda, “China Strategically Infiltrates U.S. Critical Infrastructure as Cyberattacks Escalate,” The Soufan Center, January 10, 2025, https://thesoufancenter.org/intelbrief-2025-january-10/.

31.  Benjamin Jensen, Erica Lonergan, and Kathleen McInnis, “Securing Cyber and Space: How the United StatesCan Disrupt China’s Blockade Plans,” Center for Strategic and International Studies, March 28, 2025,https://www.csis.org/analysis/securing-cyber-and-space-how-united-states-can-disrupt-chinas-blockade-plans. 

32.  Benjamin Jensen, Erica Lonergan, and Kathleen McInnis, “Securing Cyber and Space: How the United StatesCan Disrupt China’s Blockade Plans,” Center for Strategic and International Studies, March 28, 2025,https://www.csis.org/analysis/securing-cyber-and-space-how-united-states-can-disrupt-chinas-blockade-plans. 

33.  Josh Chin, “China Is Using the Private Sector to Advance Military AI,” The Wall Street Journal, September 3,2025, https://www.wsj.com/world/china/china-military-ai-partners-7836a2bc. 

34.  Benjamin Jensen, Erica Lonergan, and Kathleen McInnis, “Securing Cyber and Space: How the United States Can Disrupt China’s Blockade Plans,” Center for Strategic and International Studies, March 28, 2025,https://www.csis.org/analysis/securing-cyber-and-space-how-united-states-can-disrupt-chinas-blockade-plans. 

35.  Benjamin Jensen, Erica Lonergan, and Kathleen McInnis, “Securing Cyber and Space: How the United States Can Disrupt China’s Blockade Plans,” Center for Strategic and International Studies, March 28, 2025,https://www.csis.org/analysis/securing-cyber-and-space-how-united-states-can-disrupt-chinas-blockade-plans. 

36.  Josh Chin, “China Is Using the Private Sector to Advance Military AI,” The Wall Street Journal, September 3,2025, https://www.wsj.com/world/china/china-military-ai-partners-7836a2bc.  

37.  Benjamin Jensen, Erica Lonergan, and Kathleen McInnis, “Securing Cyber and Space: How the United States Can Disrupt China’s Blockade Plans,” Center for Strategic and International Studies, March 28, 2025,

https://www.csis.org/analysis/securing-cyber-and-space-how-united-states-can-disrupt-chinas-blockade-plans.

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