Leading VC: NSA's Activities Are 'Corroding Silicon Valley'

from the a-question-of-trust dept

Techdirt has already run a couple of stories about the longer-term damage the recently-revealed activities of the NSA are likely to have on the US computer industry. Bloomberg is reporting on how the growing distrust of US services is taking a new form: Some companies are apparently so concerned about the NSA snooping on their data that they're requiring -- in writing -- that their technology suppliers store their data outside the U.S.



In Canada, a pharmaceutical company and government agency have now both added language to that effect to their contracts with suppliers, as did a grocery chain in the U.K., according to J.J. Thompson, chief executive officer of Rook Consulting, an Indianapolis, Indiana-based security-consulting firm. He declined to name the companies, which are using Rook to manage the segmentation and keep the data out of the U.S. Significantly, that was before Der Spiegel detailed the incredible range of backdoors and vulnerabilities that the NSA is able to exploit in key software and hardware. As well as being terrible news for our privacy and freedom, this is likely to have huge knock-on consequences for the US computer and communications industries. Even though many of the companies named in the Der Spiegel piece have been quick to deny that they had any knowledge of the backdoors, their products are now inevitably tainted by the suspicion that they are compromised, and therefore cannot be trusted.

Some worry that the damage runs even deeper than a few tarnished brands. For example, the well-respected investor Michael Dearing has written an excellent post expressing his fears that: the NSA's version of patriotism is corroding Silicon Valley. Integrity of our products, creative freedom of talented people, and trust with our users are the casualties. The dolphin in the tuna net is us -- our industry, our work, and the social fabric of our community. As he explains: Billions of people let Silicon Valley into their daily lives and they hug it close. They trust our products to find information, to get work done, to talk to each other, to buy and sell stuff, and to have fun. That trust is a decades-old endowment built up by inventor-founders from Robert Noyce and Gordon Moore through to the present day. The magic of compound growth works in our favor when trust is accumulating. But now we are making trust withdrawals every day as people around the world learn how the NSA has woven surveillance, search, and seizure into and around our products. This is the painful flip side of compound growth: the trust withdrawals compound too.



Silicon Valley's promise to people is simple and compelling: "We'll build a bunch of things. Try our work; keep what you love, dump what you don't love. We'll learn from it and build on the stuff that you like best." Sadly, the NSA undermines the promise at its foundation. What that means is that the true cost of the NSA's reckless and illegal attempts to "collect it all" and "get the ungettable" may turn out to be not "just" tens or even hundreds of billions of dollars in lost business, but the far more serious loss of trust in Silicon Valley itself.

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Filed Under: economic damage, michael dearing, nsa, silicon valley, surveillance, tech industry