The United States has vaulted to the top of the global commercial spyware market, outpacing all other countries in both investment and influence, according to a sweeping new report released by the Atlantic Council on September 11, 2025. What was once a niche industry dominated by overseas players has become a lucrative—and controversial—arena for American investors, hedge funds, and private equity firms, raising alarms among civil society groups and even within the U.S. government itself.
The Atlantic Council report, which surveyed 561 entities across 46 countries from 1992 to 2024, found that in just the past year, 20 new American investors entered the spyware market. This surge brings the total number of U.S.-based backers to 31, making the United States the largest single national investor in commercial surveillance software, or "surveillanceware," as the report calls it. This figure is three times greater than the next three highest countries combined, including Israel, Italy, and the United Kingdom, as reported by The Register.
The numbers are staggering. The study identified 34 new investors globally, increasing the total from 94 to 128 in just one year. In the European Union and Switzerland, there are 31 investors—12 of them in Italy, which remains a key hub. Israel, long associated with leading spyware vendors, now counts 26 investors. Yet the U.S. has pulled ahead, both in the amount of money flowing into the sector and the breadth of its involvement.
Major American financial players are at the center of this boom. Hedge funds D.E. Shaw & Co. and Millennium Management, trading giant Jane Street, and financial services heavyweight Ameriprise Financial have all funded Cognyte, an Israeli lawful-interception software provider. According to the Atlantic Council, Cognyte has been linked to human rights abuses in Azerbaijan and Indonesia. Other big names include ThreadNeedle Asset Management, Millennium Global Investment Management, AE Industrial Partners, Dufresne Holdings—which controls a stake in the notorious NSO Group—and Blackstone Group.
While some investments are motivated by corporate intelligence and counter-intelligence needs, others appear to be driven by the desire to monitor individuals and organizations seen as threats to clients’ interests. As The Register notes, "Rapidly increasing investment into this technology is concerning, as it effectively undermines recent, concerted US government efforts to constrain the spyware market." The contradiction is stark: American companies are fueling an industry that their own government is simultaneously trying to rein in.
One of the most high-profile recent deals is the late-2024 acquisition of Israeli spyware vendor Paragon Solutions by AE Industrial Partners, a Florida-based private equity firm focused on national security. Paragon made headlines when its one-year contract with U.S. Immigration and Customs Enforcement (ICE)—first reported by WIRED in October 2024—was suddenly reactivated after a lengthy pause. The contract had been halted under a Biden-era executive order restricting the government’s use of foreign spyware. But after Paragon’s acquisition and a restructuring of its ownership, the stop-work order was lifted, and ICE resumed its relationship with the now domestically owned vendor.
This move has not gone unnoticed—or uncriticized. Civil society organizations have described the Trump administration’s decision to reactivate the ICE contract as "extremely troubling," arguing that it "compounds the civil liberties concerns surrounding the rapid and dramatic expansion of ICE’s budget and authority." The surveillance tools in question are not theoretical; they have already been linked to misconduct in Europe. WhatsApp reported that Italian journalists and civil society members were targeted using Paragon’s technology. An Italian parliamentary committee found that the government had used Paragon’s Graphite spyware to surveil human rights defenders, while the University of Toronto’s Citizen Lab confirmed the targeting of an Italian journalist and identified potential Paragon customers in countries as far-flung as Australia, Canada, Denmark, Cyprus, Singapore, and Israel.
ICE’s involvement is particularly notable. According to WIRED, the agency paid two million dollars to gain access to Paragon’s surveillance solutions. This development underscores the growing trend of U.S. law enforcement agencies turning to off-the-shelf commercial spyware, rather than relying solely on traditional government intelligence apparatuses like the NSA.
Meanwhile, the market’s rapid growth has outpaced efforts to regulate it. The Atlantic Council’s report identified a dizzying array of new market participants: two holding companies, 55 individuals, 34 investors, 18 partners, seven subsidiaries, 10 suppliers, and four vendors established in just the past year. The proliferation of resellers—organizations that operate under the radar and are difficult to track—further complicates efforts at oversight and regulation. The report’s authors warn that the true number of players in this shadowy world may be even higher than their data suggest.
Perhaps most troubling is the contradiction between U.S. industry investment and U.S. policymaking. The report highlights the case of Saito Tech Ltd, an Israeli company that develops the Candiru surveillanceware tool. Saito Tech has been on the U.S. Commerce Department’s Entity List since 2021 "based on evidence that these entities developed and supplied spyware to foreign governments that used these tools to maliciously target government officials, journalists, businesspeople, activists, academics, and embassy workers." Yet in April 2025, U.S.-based Integrity Partners bought the company behind Saito Tech for $30 million after a reorganization of intellectual property rights made the sale technically legal under American law. The Atlantic Council notes, "This new investment demonstrates both a contradiction and a critical enforcement gap: an American company is able to invest in an organization on the US Entity List, undermining the very measures that the US government has put in place to constrain spyware vendors in the first place."
For individuals—especially diplomats, journalists, activists, and politicians—the risks are real and immediate. As Boing Boing points out, anyone with the potential to "stir the pot" is a potential target for surveillance, whether by the government or by private entities with geopolitical interests. The article offers practical advice: visit the Electronic Frontier Foundation’s Surveillance Self-Defense website, secure your mobile devices, use private messaging platforms like Signal, consider the TOR browser, and develop anti-phishing skills. Even with robust anti-malware protection, vigilance is essential in an era where surveillance is increasingly privatized and commercialized.
The U.S. government, for its part, has tried to exercise some control through international agreements like the Pall Mall Process—a voluntary pact joined by nearly 30 nations and organizations to curb the spread of commercial surveillance tools. But as the Atlantic Council’s report makes clear, these efforts are being undermined by the very market forces and investment flows emanating from within the United States.
The world of commercial spyware is no longer the exclusive domain of shadowy foreign actors. With America now leading the charge, the stakes for privacy, civil liberties, and national security have never been higher. The coming years will test whether policymakers can close the widening gap between regulation and reality—or whether the U.S. will continue to bankroll the very technologies it claims to oppose.
