By akademiotoelektronik, 26/09/2022

In-Q-TEL: discreet activism of the CIA investment fund abroad

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A bit of CIA money in the French start-up ecosystem?At least a young tricolor shoot would have benefited from the support of in-Q-TEL, the investment fund of the famous American intelligence agency, said the daily Les Échos, Tuesday, October 19.

The French society in question, Prophesee, manufactures artificial retinas boosted with artificial intelligence capable of “perceiving things that a traditional camera cannot”, enthuses in-q-tel in a blog post published on 23september.

Finnish microsatellites or German sound sensors

This Parisian start-up, founded in 2014 and which collaborated with giants like the Chinese Huawei or the Japanese Sony, would be the first known investment in France of in-q-tel.The investment would have been made a few years ago, believes to know the French daily, but it has never been made public by Prophesee, nor by the CIA Fund.Even today, the two parties refuse to confirm the reality of investment, recognizes the French economic newspaper.

It would not be the first time that in-q-tel has been invested in secret in a start-up.In 2016, Chris Darby, the CEO of the American fund, recognized that out of a total of more than 310 investments since 2001, there were about a hundred that had never been made public, recalls the Wall Street Journal.

But the interest of the CIA investment fund for the tricolor nuggets is of public notoriety.In 2020, the French army had even had to call its own investment fund to rescue - Definvest - to the rescue to prevent In -q -Tel from entering the capital of Preligens, specialist in data analysisgeolocation for the intelligence and defense sector, had told the echoes at the time.

France is, moreover, not the only European country in the crosshairs of these investors in the pay of the CIA.The latter entered the capital of Spanish, British, Finnish and German start-ups.

The American Fund thus bet on Iceye, a Finnish company specializing in the construction of microsatellites, on Countercraft, a Spanish cybersecurity specialist, or on Toposens, a German manufacturer of 3D sensor of 3D sounds.

In all, In-q-Tel has officially acquired participations in fifteen European shoots.And that is without counting any investments held secret.

A recent European tropism since it dates back to the opening of a subsidiary of in-q-tel on the old continent, in London, in 2018.Previously, the money in this fund remained on American soil.

FromTetris to the CIA

Historically, in fact, In-q-Tel was founded both to take advantage of the innovations designed in Silicon Valley and to finance American start-ups in sectors that the CIA considered criticism for the United States, says John T.Reinert, an American lawyer author of one of the few studies devoted to the investment strategy of in-q-tel published in 2013.

At the end of the 1990s, the CIA faced a double dilemma: its budget had been seriously revised down since the end of the Cold War, and the agency then saw Silicon Valley becoming the world Mecca of innovation innovation, without being able to take advantage of it.Hence the idea of creating an investment fund in 1999 on the model of those who financially accompanied the beginnings of all these fashionable start-ups in California.With one difference: In-Q-TEL does not have to make profits and works 100 % with public money.

To put young entrepreneurs with confidence, the CIA places the head of in-q-tel Gilman Louie, a business manager who has nothing to do with spying.Its main fact of a weapon was to have imported a Soviet video game in the United States called...Tetris.

In-q-tel is quickly considered a very promising tool by the American administration.As early as June 2001, a report by the independent Business Executives for National Security - bringing together business leaders responsible for reflecting on national security issues - concludes that this investment fund “allowed the CIA to quickly identify theemerging technologies that may have an impact on its activity ”.

But success is controversial.In-q-Tel is best known to the general public in the United States for having been one of the first investors in Palantir, the Big Brother of the Big Data renowned for proposing electronic surveillance tools to the police.

Chris Darby, who took over the management of In-q-Tel in 2006, defended the action of the investment fund several times, ensuring that his collaboration with start-ups had saved lives.Questioned in 2016 by the Wall Street Journal, he had for example explained how the work of an American company specializing in the analysis of chemical residues present in carpets and supported by in-q-tel had allowed the army of S'Equipping devices capable of detecting the presence of dangerous chemicals in Afghanistan or Iraq.

Global competition with China

This financial structure is not content to share the CIA of the creative manna of Silicon Valley.At the head of a budget slightly greater than $ 100 million a year, she also tries to bring out champions in strategic fields in the eyes of American spies.

This is how the first investments concerned start-ups working in the field of satellites, recalls the lawyer John T.Reinert in his study on in-q-tel.They then turned to the analysis and storage of data as well as artificial intelligence.

Today, "major challenges are quantum computing, 5G communication infrastructure, microprocessors and especially biotechnologies," said Chris Darby in 2020 before the Congress.

A list of priorities identical to that of the Chinese.And it is not a hazard."The competition between the great powers to know who will extend its influence on the world requires the ability of a country to be technologically dominant," said Chris Darby.

Hence the idea of in-q-al to start investing also outside American borders, where China already multiplied the acquisitions of start-ups.The opening of the first subsidiary of the investment fund in London was thus decided in 2018, at the very moment when ex-President Donald Trump launched his trade war against Beijing.

A year later, another antenna was opened in Australia, a country which is at the heart of the fight of influence that the United States and China are engaged in the Pacific.

"This strategy is a way of countering the Chinese" threat "in high technology," says the newspaper Les Échos.In-q-Tel would feel invested with a mission: to offer an American alternative, facing the Chinese windfall, European or Australian start-ups.

The case of the French start-up Prophesee perfectly illustrates this investment battle.The Chinese are also interested in this company, since the Sinovation fund and the Chinese manufacturer of smartphones Xiaomi entered its capital in July 2021...

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