San Jose Mercury News, Steve Johnson - June 11, 2012
With technology that would make James Bond envious, Silicon Valley companies are playing a behind-the-scenes role with the nation's most clandestine agencies, helping to develop everything from miniature cameras to surreptitious communication gear to holograms that highlight patterns in mountains of data.
Silicon Valley in years past has supplied surveillance satellites, missiles and electronic warfare gadgets to the government. But more recently, a dazzling array of other innovations has grabbed the interest of the country's covert operatives. Nearly a third of the 87 companies listed in the portfolio of In-Q-Tel, an investment fund for the CIA and other secretive branches of the federal government, are based here.
"Silicon Valley has a rich history of attracting great minds and producing cutting-edge results," said Chris Darby, the fund's CEO and a former vice president at Santa Clara chipmaker Intel (INTC). Noting that one of the fund's three offices is in Menlo Park, he added, "It's important for us to maintain relationships in the startup and investment communities to understand future trends and help keep our partners informed about what's on the horizon."
In-Q-Tel doesn't reveal how much money it gives companies, though Darby said of the more than 180 firms it has financed since its inception in 1999, most typically receive $1 million to $3 million. While the websites for companies financed by the group suggest that many have technology that can be used to analyze personal data -- an issue of concern to privacy rights advocates -- Darby declined to discuss which technologies the intelligence community has adopted from Silicon Valley.
Executives with several of the Bay Area companies it has financed also were hesitant to talk. Some declined to be interviewed. Others said they either didn't know how their innovations were being used or were prohibited from commenting.
But a few gave tantalizing hints.
Amir Abolfathi, CEO of Sonitus Medical of San Mateo, revealed that the company is developing a tiny, wireless, two-way communications device for "the U.S. intelligence community." Noting that it covertly sits in a person's mouth, he said one of its chief attributes is that "nobody knows you are wearing anything."
Another In-Q-Tel recipient is Infinite Z of Mountain View, which makes holographic simulations. While commenting that "In-Q-Tel has been extremely supportive of us," CEO Paul Kellenberger was vague about possible governmental applications of the technology, called zSpace. But the product's website notes that by manipulating data in three dimensions to spot patterns and trends, it serves "the demanding needs of intelligence analysts," among others.
Another firm financed by the clandestine group is Fluidigm of South San Francisco, which makes microchips that analyze genetic samples. CEO Gajus Worthington speculated that the chips could be used to identify the human remains of terrorist bombings and track down the culprits, but added, "I have no idea what In-Q-Tel wanted to do with our platform."
And then there is Silver Trail Systems' technology, which can spot suspicious activity on government websites. That's a topic of particular interest to federal authorities, who in recent months have appealed to Bay Area companies for help in combating cyberattacks.
"They paid us to develop certain features that were of interest to their community," said co-founder Laura Mather, formerly with eBay (EBAY) and the National Security Agency. She added that based on her company's experience with In-Q-Tel, "we're investing in the resources to pursue additional government customers."
Others financed by the spy agencies include LensVector of Sunnyvale, which makes technology for tiny cameras; 3VR of San Francisco, whose video surveillance gear can analyze faces, license plates and other images; and Palo Alto-based Palantir Technologies, which says its database tools can peruse vast troves of information to find links among terrorists.
Yet another intriguing In-Q-Tel venture is NetBase, which offers "semantic-search capabilities" that can read online postings in English, Spanish, French, German and Portuguese. The company touts its technology for monitoring social media sites, which its said contain "a wealth of useful information hidden in the millions of conversations."
Virginia-based In-Q-Tel was created to address the shift from the time when the federal government was a key financier of cutting-edge technology to the current reality, where private industry is the primary innovator.
Not everyone is enthusiastic about spy agencies getting their hands on new technology, particularly since much of it can be used to monitor individuals.
"They're definitely gathering information on everyone," said Rebecca Jeschke, a digital rights analyst with the Electronic Frontier Foundation. "It's a problem for the average person because the government is just sucking up data about your everyday life and we don't know what they are going to do with that."
Given its interest in data, it's not surprising the government is so keen on the Bay Area, said Steve Blank, a longtime entrepreneur and Stanford University lecturer, who has written a history of Silicon Valley's ties to covert agencies.
For more than a half-century, this region produced everything from surveillance satellites to radar-jamming devices. But now, it is cranking out computerized consumer gadgets and related products that are generating vast amounts of information about U.S. citizens and others around the world.
As a result, "you have more data than the NSA and CIA could ever dream about," he said. "J. Edgar Hoover would have died for this."
Contact Steve Johnson at 408-920-5043.
Founded: By private citizens in 1999 at the request of the CIA's director to "build a bridge between the agency and a new set of technology innovators."
Offices: Based in Arlington, Va., it also has offices in Menlo Park and Waltham, Mass.
Number of companies financed: More than 180
Leadership: Four of its 12 board members have Silicon Valley ties. They are CEO Chris Darby, a former vice president at Intel; former Netscape Communications CEO James Barksdale; Howard Cox, of the Menlo Park venture capital firm Greylock Partners; and Elisabeth Paté-Cornell, a management science and engineering professor at Stanford University.
Posted: 06/11/2012 06:30:44 AM PDT
Updated: 06/18/2012 11:27:13 AM PDT