The US Emerges as Largest Investor in Commercial Spyware, Raising Grave Concerns for Human Rights and National Security
A recent report by the Atlantic Council has revealed that the United States is now the largest investor in commercial spyware, a global industry that has enabled the covert surveillance of journalists, human rights defenders, politicians, diplomats, and others. This growth has largely outpaced other major investing countries such as Israel, Italy, and the United Kingdom, according to the report.
The Rise of US-Based Spyware Investors
In 2024, 20 new US-based spyware investors were identified, bringing the total number of American backers of this technology to 31. This includes major hedge funds D.E. Shaw & Co. and Millennium Management, prominent trading firm Jane Street, and mainstream financial-services company Ameriprise Financial. All of these companies have channeled funds to Israeli lawful-interception software provider Cognyte, a company allegedly linked to human rights abuses in Azerbaijan and Indonesia.
The report highlights the significant increase in US-based investors, with some notable examples including:
- D.E. Shaw & Co., which has invested heavily in spyware technology
- Millennium Management, which has also invested significantly in this industry
- Jane Street, a prominent trading firm that has channeled funds to Israeli lawful-interception software provider Cognyte
- Ameriprise Financial, a mainstream financial-services company that has invested in spyware technology
The Role of Resellers and Brokers
The report also highlights the central role that resellers and brokers play in the global spyware market. These entities act as intermediaries, obscuring the connections between vendors, suppliers, and buyers. Oftentimes, intermediaries connect vendors to new regional markets.
According to the report, "These entities act as intermediaries, obscuring the connections between vendors, suppliers, and buyers. Oftentimes, intermediaries connect vendors to new regional markets."
This creates an expanded and opaque spyware supply chain, which makes corporate structures, jurisdictional arbitrage, and ultimately accountability measures a challenge to disentangle.
New Countries Linked to Spyware Activity
The study reveals the addition of three new countries linked to spyware activity—Japan, Malaysia, and Panama. Japan in particular is a signatory to international efforts to curb spyware abuse, including the Joint Statement on Efforts to Counter the Proliferation and Misuse of Commercial Spyware and the Pall Mall Process Code of Practice for States.
"The discovery of entities operating in new jurisdictions, like Japan, highlights potential conflicts of interest between international commitments and market dynamics," Graham says.
US Policymakers Face a Critical Gap
Despite efforts by the Biden administration to constrain the spyware market through its executive order, trade restrictions, and sanctions, the industry has continued to operate largely without restraint. US policymakers have systematically targeted the proliferation and misuse of spyware through robust policy action, but there is a critical gap between them and US investors—where US dollars continue to fund the very entities US policymakers are trying to combat.
"US policymakers have systematically targeted the proliferation and misuse of spyware through robust policy action, but there is a critical gap between them and US investors—where US dollars continue to fund the very entities US policymakers are trying to combat," says Atlantic Council’s Jen Roberts, who also worked on the report.
The Need for Public Awareness
There is limited public awareness that some of the money spent on this controversial technology may ultimately come from ordinary citizens’ own pockets. In the case of AE Industrial Partners, investment performance reports show that the firm was backed by several US pension funds—among them the Contra Costa County Employees’ Retirement Association, Baltimore Fire & Police Retirement System, Houston Firefighters’ Relief and Retirement Fund, and the New Mexico Educational Retirement Board.
"This highlights the need for better understanding from both US government and the public—that the average American might not understand how their dollars are funding the proliferation and misuse of spyware," says Roberts.
Call for Further Action
The Atlantic Council’s Roberts calls for further action to target US outbound investment and suggests broadening the scope of Executive Order 14105—which already requires notification of overseas investments in quantum technology, AI, semiconductors, and microelectronics—to also cover investment in spyware. Some reports suggest that the administration may also be considering amendments to the Biden-era Executive Order 14093 that restricts government use of spyware.
In particular, it is crucial to maintain this executive order, which leverages US purchasing power to protect Americans against this technology.
"US purchasing power is a significant tool in shaping and constraining the global market for spyware," Roberts explains.
This story originally appeared on wired.com.