Hitting the Books: When the military-industrial complex came to Silicon Valley

Turns out, Big Tech has bought a lot of CIA-backed startups over the years.

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As with most every other aspect of modern society, computerization, augmentation and automation have hyper-accelerated the pace at which wars are prosecuted — and who better to help reshape the US military into a 21st century fighting force than an entire industry centered on moving fast and breaking things? In his latest book, War Virtually: The Quest to Automate Conflict, Militarize Data, and Predict the Future, professor and chair of the Anthropology Department at San José State University, Roberto J González examines the military's increasing reliance on remote weaponry and robotic systems are changing the way wars are waged. In the excerpt below, González investigates Big Tech's role in the Pentagon's high-tech transformations.

War Virtually cover
UC Press

Excerpted from War Virtually: The Quest to Automate Conflict, Militarize Data, and Predict the Future by Roberto J. González, published by the University of California Press. © 2022 by Roberto J. González.

Ash Carter’s plan was simple but ambitious: to harness the best and brightest ideas from the tech industry for Pentagon use. Carter’s premise was that new commercial companies had surpassed the Defense Department’s ability to create cutting-edge technologies. The native Pennsylvanian, who had spent several years at Stanford University prior to his appointment as defense secretary, was deeply impressed with the innovative spirit of the Bay Area and its millionaire magnates. “They are inventing new technology, creating prosperity, connectivity, and freedom,” he said. “They feel they too are public servants, and they’d like to have somebody in Washington they can connect to.” Astonishingly, Carter was the first sitting defense secretary to visit Silicon Valley in more than twenty years.

The Pentagon has its own research and development agency, DARPA, but its projects tend to pursue objectives that are decades, not months, away. What the new defense secretary wanted was a nimble, streamlined office that could serve as a kind of broker, channeling tens or even hundreds of millions of dollars from the Defense Department’s massive budget toward up-and-coming firms developing technologies on the verge of completion. Ideally, DIUx would serve as a kind of liaison, negotiating the needs of grizzled four-star generals, the Pentagon’s civilian leaders, and hoodie-clad engineers and entrepreneurs. Within a year, DIUx opened branch offices in two other places with burgeoning tech sectors: Boston, Massachusetts, and Austin, Texas.

In the short term, Carter hoped that DIUx would build relationships with local start-ups, recruit top talent, get military reservists involved in projects, and streamline the Pentagon’s notoriously cumbersome procurement processes. “The key is to contract quickly — not to make these people fill out reams of paperwork,” he said. His long-term goals were even more ambitious: to take career military officers and assign them to work on futuristic projects in Silicon Valley for months at a time, to “expose them to new cultures and ideas they can take back to the Pentagon... [and] invite techies to spend time at Defense.”

In March 2016, Carter organized the Defense Innovation Board (DIB), an elite brain trust of civilians tasked with providing advice and recommendations to the Pentagon’s leadership. Carter appointed former Google CEO (and Alphabet board member) Eric Schmidt to chair the DIB, which includes current and former executives from Facebook, Google, and Instagram, among others.

Three years after Carter launched DIUx, it was renamed the Defense Innovation Unit (DIU), indicating that it was no longer experimental. This signaled the broad support the office had earned from Pentagon leaders. The Defense Department had lavished nearly $100 million on projects from forty-five companies, almost none of which were large defense contractors. Despite difficulties in the early stages — and speculation that the Trump administration might not support an initiative focused on regions that tended to skew toward the Democratic Party — DIUx was “a proven, valuable asset to the DoD,” in the words of Trump’s deputy defense secretary, Patrick Shanahan. “The organization itself is no longer an experiment,” he noted in an August 2018 memo, adding: “DIU remains vital to fostering innovation across the Department and transforming the way DoD builds a more lethal force.” Defense Secretary James “Mad Dog” Mattis visited Amazon’s Seattle headquarters and Google’s Palo Alto office in August 2017 and had nothing but praise for the tech industry. “I’m going out to see what we can pick up in DIUx,” he told reporters. In early 2018, the Trump administration requested a steep increase in DIU’s budget for fiscal year 2019, from $30 million to $71 million. For 2020, the administration requested $164 million, more than doubling the previous year’s request.


Although Pentagon officials portrayed DIUx as a groundbreaking organization, it was actually modeled after another firm established to serve the US Intelligence Community in a similar way. In the late 1990s, Ruth David, the CIA’s deputy director for science and technology, suggested that the agency needed to move in a radically new direction to ensure that it could capitalize on innovations being developed in the private sector, with a special focus on Silicon Valley firms. In 1999, under the leadership of its director, George Tenet, the CIA established a nonprofit legal entity called Peleus to fulfill this objective, with help from former Lockheed Martin CEO Norman Augustine. Soon after, the organization was renamed In-Q-Tel.

The first CEO, Gilman Louie, was an unconventional choice to head the enterprise. Louie had spent nearly twenty years as a video game developer who, among other things, created a popular series of Falcon F-16 flight simulators. At the time he agreed to join the new firm, he was chief creative officer for the toy company Hasbro. In a 2017 presentation at Stanford University, Louie claimed to have proposed that In-Q-Tel take the form of a venture capital fund. He also described how, at its core, the organization was created to solve “the big data problem”:

The problem they [CIA leaders] were trying to solve was: How to get technology companies who historically have never engaged with the federal government to actually provide technologies, particularly in the IT space, that the government can leverage. Because they were really afraid of what they called at that time the prospects of a “digital Pearl Harbor” Pearl Harbor

happened with every different part of the government having a piece of information but they couldn’t stitch it together to say, “Look, the attack at Pearl Harbor is imminent.” The White House had a piece of information, naval intelligence had a piece of information, ambassadors had a piece of information, the State Department had a piece of information, but they couldn’t put it all together [In] 1998, they began to realize that information was siloed across all these different intelligence agencies of which they could never stitch it together [F]undamentally what they were trying to solve was the big data problem. How do you stitch that together to get intelligence out of that data?

Louie served as In-Q-Tel’s chief executive for nearly seven years and played a crucial role in shaping the organization.

By channeling funds from intelligence agencies to nascent firms building technologies that might be useful for surveillance, intelligence gathering, data analysis, cyberwarfare, and cybersecurity, the CIA hoped to get an edge over its global rivals by using investment funds to co-opt creative engineers, hackers, scientists, and programmers. The Washington Post reported that “In-Q-Tel was engineered with a bundle of contradictions built in. It is independent of the CIA, yet answers wholly to it. It is a non- profit, yet its employees can profit, sometimes handsomely, from its work. It functions in public, but its products are strictly secret.” In 2005, the CIA pumped approximately $37 million into In-Q-Tel. By 2014, the organization’s funding had grown to nearly $94 million a year and it had made 325 investments with an astonishing range of technology firms, almost none of which were major defense contractors.

If In-Q-Tel sounds like something out of a James Bond movie, that’s because the organization was partly inspired by — and named after — Q Branch, a fictional research and development office of the British secret service, popularized in Ian Fleming’s spy novels and in the Hollywood blockbusters based on them, going back to the early 1960s. Ostensibly, both In-Q-Tel and DIUx were created to transfer emergent private-sector technologies into the US intelligence and military agencies, respectively. A somewhat different interpretation is that these organizations were launched “to capture technological innovations... [and] to capture new ideas.” From the perspective of the CIA these arrangements have been a “win-win,” but critics have described them as a boondoggle — lack of transparency, oversight, and streamlined procurement means that there is great potential for conflicts of interest. Other critics point to In-Q-Tel as a prime example of the militarization of the tech industry.

There’s an important difference between DIUx and In-Q-Tel. DIUx is part of the Defense Department and is therefore financially dependent on Pentagon funds. By contrast, In-Q-Tel is, in legal and financial terms, a distinct entity. When it invests in promising companies, In-Q-Tel also becomes part owner of those firms. In monetary and technological terms, it’s likely that the most profitable In-Q-Tel investment was funding for Keyhole, a San Francisco–based company that developed software capable of weaving together satellite images and aerial photos to create three-dimensional models of Earth’s surface. The program was capable of creating a virtual high-resolution map of the entire planet. In-Q-Tel provided funding in 2003, and within months, the US military was using the software to support American troops in Iraq.

Official sources never revealed how much In-Q-Tel invested in Keyhole. In 2004, Google purchased the start-up for an undisclosed amount and renamed it Google Earth. The acquisition was significant. Yasha Levine writes that the Keyhole-Google deal “marked the moment the company stopped being a purely consumer-facing internet company and began integrating with the US government [From Keyhole, Google] also acquired an In-Q-Tel executive named Rob Painter, who came with deep connections to the world of intelligence and military contracting.” By 2006 and 2007, Google was actively seeking government contracts “evenly spread among military, intelligence, and civilian agencies,” according to the Washington Post.

Apart from Google, several other large technology firms have acquired startups funded by In-Q-Tel, including IBM, which purchased the data storage company Cleversafe; Cisco Systems, which absorbed a conversational AI interface startup called MindMeld; Samsung, which snagged nanotechnology display firm QD Vision; and Amazon, which bought multiscreen video delivery company Elemental Technologies. While these investments have funded relatively mundane technologies, In-Q-Tel’s portfolio includes firms with futuristic projects such as Cyphy, which manufactures tethered drones that can fly reconnaissance missions for extended periods, thanks to a continuous power source; Atlas Wearables, which produces smart fitness trackers that closely monitor body movements and vital signs; Fuel3d, which sells a handheld device that instantly produces detailed three-dimensional scans of structures or other objects; and Sonitus, which has developed a wireless communication system, part of which fits inside the user’s mouth. If DIUx has placed its bets with robotics and AI companies, In-Q-Tel has been particularly interested in those creating surveillance technologies — geospatial satellite firms, advanced sensors, biometrics equipment, DNA analyzers, language translation devices, and cyber-defense systems.

More recently, In-Q-Tel has shifted toward firms specializing in data mining social media and other internet platforms. These include Dataminr, which streams Twitter data to spot trends and potential threats; Geofeedia, which collects geographically indexed social media messages related to breaking news events such as protests; PATHAR, a company specializing in social network analysis; and TransVoyant, a data integration firm that collates data from satellites, radar, drones, and other sensors. In-Q-Tel has also created Lab41, a Silicon Valley technology center specializing in big data analysis and machine learning.

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