Squad mates typically default to running headlong into battle regardless of any orders the player provides. Other times they simply stand idly by, getting killed while the player does all the work. In theory, the "morale system" would give squads a performance boost if the player was performing well - but we didn't see much difference. Either there's no way to please theseingrates or it just doesn't work.
Poor A.I. extends to enemies, as well. Most large-scale encounters provide the player with the enemy's weak spot. Once exposed, the baddie will do nothing to protect itself, resulting in too easy a victory. Even the multiplayer portion of BlackSite, in which the A.I. is discarded in favor of human opponents, features only generic deathmatch and capture-the-flag modes.