Silicon Valley is piling in to the business of snooping

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Even more surprising is where the technology is coming from. Among the NYPD’s suppliers is Skydio, a Silicon Valley firm that uses artificial intelligence (AI) to make drones easy to fly, allowing officers to control them with little training. Skydio is backed by Andreessen Horowitz, a venture-capital (VC) giant, and Accel, one of its peers. The NYPD is also buying from BRINC, another startup, which makes flying machines equipped with night-vision cameras that can smash through window panes. Among BRINC’s investors are Sam Altman, the boss of OpenAI, the startup behind ChatGPT; and Index Ventures, another VC stalwart.

That Silicon Valley is helping American law enforcement snoop on troublemakers may seem odd. Supporting state surveillance sits awkwardly with the libertarian values espoused by many American tech luminaries who came of age in the early days of the internet. Although Silicon Valley got its start supplying chips for America’s defence industry in the 1950s, its relationship with the state withered as its attention shifted from self-guided missiles to e-commerce and iPhones.

Now, as the tech industry seeks out new frontiers of growth, selling to the state is coming back into vogue. Government is “the last remaining holdout from the software revolution”, wrote Katherine Boyle of Andreessen Horowitz in a blog post last year. Earlier this year the firm launched an “American Dynamism” fund to invest in government-related industries. Slowly but surely, the state is dragging itself into the digital age. At the end of 2022 the Pentagon awarded a $9bn cloud-computing contract to Alphabet, Amazon, Oracle and Microsoft, four tech giants. Last year 11% of the value of federal contracts awarded to businesses was for software and technology, up from 8% a decade ago, according to The Economist’s calculations.

Surveillance is one government activity that is being upgraded. New technologies for observation and analysis are transforming the field. Conventional suppliers such as Axon Enterprise and Motorola Solutions, which sell cameras and sundry surveillance gubbins to police and other security organisations, are being joined by upstarts pushing whizzier technologies.

The first of these is drones. That industry has been dominated by DJI, a Chinese manufacturer that last year provided nearly three-quarters of all drones sold in America. This has caused much hand-wringing in American government circles. On November 1st a bill was introduced in Congress that would ban all federal government departments from buying Chinese drones. Some states, including Florida, have already prohibited emergency services from doing so. All this is proving a boon for the likes of Skydio and Brinc. Other types of aerial snooping device are also in the works. Skydweller, another startup, is developing an autonomous solar-powered aircraft. If it works, it will not have to land to recharge. That, says the company, would allow for “persistent surveillance”.

A second ascendant technology is satellites. SpaceX, Elon Musk’s rocket company, and its copycats have helped reduce the price of sending objects into space to around one-tenth of the level two decades ago. That has led to a carpeting of low-Earth orbit with satellites, around one-eighth of which are used for observing the planet. PitchBook, a data firm, reckons there are now nearly 200 companies in the business of selling satellite imagery—so many that the market has become commoditised, according to Trae Stephens of Founders Fund, another VC firm. BlackSky, one of those firms, says it can take an image of a spot on Earth every hour or so. Satellite imagery has come a long way in the decade since police in Oregon used pictures from Google Earth to uncover an illegal marijuana-growing operation in a resident’s back yard.

Techies are also selling tools to help law enforcement make better use of the profusion of images and information now at their fingertips. Ambient.AI, another startup backed by Andreessen Horowitz, has developed technology that automatically monitors cameras for suspicious activity. Palantir, a data-mining firm that has injected itself into America’s military-industrial complex, sells its tools to the likes of the Los Angeles Police Department.

Facial-recognition software is now used more widely across America, too, with around a tenth of police forces having access to the technology. A report released in September by America’s Government Accountability Office found that six federal law-enforcement agencies, including the FBI and the Secret Service, were together executing an average of 69 facial-recognition searches every day. Among the top vendors listed was Clearview AI, a company backed by Peter Thiel, a VC veteran.

Surveillance capabilities may soon be further beefed up by generative AI, of the type that powers ChatGPT, thanks to its ability to work with “unstructured” data such as images and video footage. Will Marshall, the boss of Planet Labs, a satellite company, says that analysing satellite imagery with the technology will let you “search the Earth for objects”, much like Google lets you search the internet for information.

Silicon snoopers

For the industry’s upstarts, pushing clever new surveillance technologies to the government is not easy. Selling to law enforcement means getting to know a large and dispersed number of police chiefs. Rick Smith, the boss of Axon, notes that there are 18,000 police departments in America. One-fifth of them do not even use electronic records. As recently as 2009, the NYPD was still buying typewriters.

For newcomers that do gain a foothold, however, the rewards can be rich. David Ulevitch, who runs Andreessen Horowitz’s American Dynamism fund, says word of mouth can spread fast, creating “virality”. Fusus, a startup that sells real-time crime-monitoring software, claims its sales grew by over 300% last year, albeit from a low base. In 2017 Flock Safety, another startup, launched a licence-plate reader that is now used in 47 American states. What’s more, notes Paul Kwan of General Catalyst, another VC firm, relationships with government buyers, once established, tend to be sticky.

The bigger firms are not standing still. Motorola Solutions has made 15 acquisitions since 2019, including Calipsa, a video-analytics tool, and WatchGuard, which makes cameras for cop-car dashboards. Axon has also acquired startups and taken stakes in others, including Fusus and Skydio.

The application of new technological wizardry to the job of surveilling citizens will make many uncomfortable. In 2020 Amazon, Microsoft and IBM swore off providing facial-recognition services to law-enforcement agencies over privacy concerns.

But surveillance is likely to remain lucrative, not least because governments are not the only customers for these technologies. Skydio’s drones assess cell towers and bridges for damage. Hedge funds use satellite imagery to count the cars in retailers’ parking lots, hoping to gauge their revenues ahead of market disclosures. SmartEye, a Swedish firm, sells eye-tracking technology to monitor the mood of pilots. It also sells its wares to advertising firms. The trend towards greater surveillance, whether by big brother or big business, looks unlikely to reverse any time soon.

© 2023, The Economist Newspaper Limited. All rights reserved. From The Economist, published under licence. The original content can be found on www.economist.com

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