A budding group of venture capital firms and investors are working with the CIA and other U.S. intelligence and military agencies in an attempt to help shape the future of Silicon Valley, ensuring companies produce innovations useful for national security while avoiding funding from potential adversaries like China. Call it the new world of “spooky finance.”
These firms — like New North Ventures, Harpoon, Scout Ventures, and Razor’s Edge — are often themselves staffed by former U.S. intelligence and military officials, and sometimes work together to cofund national-security-related startups in areas such as artificial intelligence, cybersecurity, and next-generation communications.
The new world of “spooky finance” reveals an increasingly tight relationship between venture capital firms and U.S. spy and military agencies, which have long sought to tap into Silicon Valley’s technology base.
“What you’re seeing, and it’s basically been developing over time, is an ‘intelligence-industrial base,’” says Ronald Marks, a visiting professor at George Mason University and a former CIA officer.
“You had a military-industrial base before — now, you’ve got an intelligence-industrial base,” says Marks. “Why? Because, let’s face it: All the intel stuff together now is, like, 86 billion dollars. It’s the third-largest part of the discretionary budget of the United States. That’s a lot of money; that’s a Fortune 100 company.”
Greater coordination between Silicon Valley and Washington’s national security bureaucracies is much needed, according to Heather Richman, founder of the Defense Investor Network, a Silicon Valley-based group that connects senior officials from the Pentagon and U.S. intelligence agencies with venture capital firms and startups doing work with national security applications.
