The purpose of this research is to investigate the question: How does the EU face a security dilemma in response to China’s AI ambitions? The thesis explores the theory of the security dilemma associated with neorealist/structural realist approaches as it aims to predict the behaviour of states in an international anarchic system. The pace of the AI race and its applications in military use contribute to a rising security threat because Europe is lagging China and US in its strategy to become a global leader in AI. Growing tensions globally, including the war in Ukraine, together with a backdrop of deteriorating diplomatic relations with China bring political urgency to Europe’s security dilemma. The exclusion of AI for military use from the scope of the AIA implies a lack of EU-wide legal and ethical provisions for military use of AI. Member States will inevitably adopt different approaches leading to inefficiencies and divergences in oversight. Europe should develop a framework for accommodatingdual-use and military AI for defensive and offensive objectives. With a risk of member states adopting different positions, the Commission is likely to introduce a new post for a Defence Commissioner to respond to the unfolding security dilemma. European security dilemma risk mitigation includes establishing a competitive AI ecosystem within meaningful timelines, extending the development of foreign policy thataccommodates response to security threats from innovative AI-led military developments in other states, and greater collaboration with US and China to influence future standards for use of autonomous weapons system and digital security.