The AI may be doing two things wrong (that it could realistically do better) that lead to its demise:
1. It doesn't store/save as many military goods as it might need at war, even before declaring it.
2. The AI is not able to purchase enough military goods when at war.
I'm sure this is not isolated to Cold War scenario, but I am playing Cold War scenario, where Czechoslovakia declared war on West Germany.
West Germany received active help from France, UK and US, while Czechoslovakia received active help from Hungary, Poland, Romania, Bulgaria and Albania.
The Czechoslovakian side seemed to have more troops, bigger stacks. Sure, West Germany received lots of help, but in my opinion, it should not have been enough.
The problem is, I saw that Czechoslovakia, Hungary and Poland - all had 0 military goods. Their units weren't fighting. UK, US and West Germany, on the other hand, had lots of military supplies. I see this as a problem, because Czechoslovakia declared the war. They had too few military supplies and even during the war didn't seek out more. Poland and Hungary also continued at 0, even though they sent loads of units.
I have a save game where this happened, however, it is not an optimal savegame, because I ruined it a bit. I loaded the game and tried to supply Czechoslovakia with military goods (to no avail, as it ate too much). So at the beginning of this savegame, Czechoslovakia has military goods. However, run a few days and you will see them stay at a permanent 0, together with all Czechoslovakian allies.
I would like to suggest changing something mechanically, to let countries consider their military goods when declaring war, AND to more actively pursuit military goods when at war and especially when at 0.
I would like to stress that I have seen this happen in modern scenarios as well.
Here is the save file:
https://ufile.io/6uoax
Military goods issue.
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