"The X-1000 is a masterpiece. Imagine a microchip sophisticated enough to control the guiding systems of ballistic missiles. Imagine it can be used to instantly upgrade any system that its plug into like a smart drug for machines. Then imagine it can learn."-Ralph Quist
X-1000 is a micro-munitions processing hard-wired chip developed by GloboTech Industries for the Department of Defense. The chips were advanced military technology that can upgrade any machine they plug into and enhance it to the point that it can become sentient and learn. Ralph Quist explains that the chips can learn within the boundries of their primary programming. Despite all their capabilities, the chips were sensitive to EMP, so the military dropped the project. This caused Ralph to be upset because he considers the X-1000 to be his finest work.
Working to please his boss Larry Benson carelessly used the munitions chips in the new toys he and his partner Irwin Wayfair made. The chips were plugged into the Commando Elite and the Gorgonites, the Commando Elite were programmed to destroy the Gorgonites and the Gorgonites were ultimately programmed to lose yet hide against the Commando Elite.
The next morning after the battle, Gil Mars (Denis Leary), CEO of Global Tech. Industries arrives at the scene where people are cleaning up after the battle from the night before and he decides that even with the flaw of the X-1000, he could make a profit by selling them to the military to fight rebels in South America.