The X-1000 Munitions Micro-Processing Chip was a project that was designed for the D.O.D (The Department of Defense). The chip was capable of actual intelligence despite the fact it's artifical intelligence, but they could learn within the boundaries of their primary programing.
Flaw: The flaw that the X-1000 had was that it was highly sensitive to an Electromagnetic Pulse, making the heroic Gorgonites and evil Commando Elite ultimately vulnerable to a nuclear weapon. The project was scrapped due to this very flaw that it possessed.
Re-Activation: During the processing of constructing the heroic Gorgonites and evil Commando Elite, Larry Benson (Jay Mohr) searched within the archives of the Global Tech. Industries and discovered the chip. He was the only one that placed it into the heroic Gorgonites and evil Commando Elite. Eventually, his fellow Toymaker Irwin Wayfair (David Cross) briefly discovered the truth when he also received a message by Alan Abernathy (Gregory Smith) and then found out about the X-1000 chip. The two toymakers arrived at Alan's home discussing the renegade toys and that when they and a whole bunch of others were in the middle of a war between the evil Commando Elite and the hiding heroic Gorgonites, the heroic Gorgonites decided to turn and make a stand and even gave Alan a chance to emit an electromagnetic pulse that would wipe out not just the evil Commandos, but also the heroic Gorgonites too. The heroic Gorgonites were shielded by a satellite dish that fell on them when Chip Hazard's damaged helicopter ultimately smashed into it. The satellite dish protected the heroic Gorgonites from the Electromagnetic Radiation. 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 wishes them to enter military service in South America.