US military nearly attacked a Chinese ship because of false, hallucinated AI claim that the ship had nuclear weapons components on it. Planes were "in the air" and the attacks was halted "only just before" they were set to begin.
cnn.com
Exclusive: US military had close call after using AI for false intelligence report, sources say | CNN Politics
The episode shows the risks of using this new, relatively poorly understood technology in the middle of the Iran war