America's military budget, at $615 billion, dwarfs those of its closest competitors, China ($211 billion) and Russia ($69 billion). Even with that advantage, a new report finds that the U.S. is at risk of falling behind in the race to find and create AI for military applications.

In 2014, U.S. Secretary of Defense Chuck Hagel announced that his department intended to lead the coming AI revolution with what he called the “Third Offset Strategy.” For the uninitiated, the Second Offset Strategy was in response to the buildup of conventional forces along the Central European front by the Soviet Union and its satellite states ... which itself was a response to the First Offset Strategy that had the U.S. putting its own forces in the field. America didn’t want to match the Soviets soldier for soldier, so new technology like long-range sensors and a new generation of guided munitions and submunitions was developed to give the U.S. an edge.

Hagel wanted to approach the third iteration in much the same way, but in the last few years, new military uses of AI have been increasingly pioneered by the Russians and Chinese. Russia in particular is open about its development of increasingly powerful robotic systems meant for warfare, while China has announced plans to be the “the front-runner and global innovation center in AI” by 2030. Battle-ready artificial intelligence is also on the mind of NATO, which released a report Wednesday stating that NATO needs to prepare for the future of war by investing in AI.

AI-driven military development doesn’t just have to be robot soldiers and armed drones, either. In the report detailing America’s risk of falling behind Russia and China, Govini, a data analytics firm that contracts with the U.S. government, describes uses for AI that can help humans make more timely and relevant combat decisions, new forms of human-machine collaboration, and new ways that neural nets can help make sense of some of the massive data sets that the military has access to.

To be clear, the Department of Defense isn’t completely sleeping on AI. Spending on AI, big data, and cloud services reached $7.4 billion in the 2017 fiscal year, which is almost a third more than what was spent in 2012.

And the U.S. does have one advantage over other countries: its private sector. The commercial sector spends far more each year than the DoD does on AI: Ford spent $1 billion to buy an AI startup in a single deal this past February, for example. On a trip to Silicon Valley earlier this year, Defense Secretary James Mattis said he sees a need to do a better job of integrating commercial AI into his department. If this report is any indication, he’s got a big job in front of him.