Sources: NSO's Pegasus software, which requires an export license because it is considered a weapon, has become a crucial part of Israel's diplomatic outreach
the holy cow of the economy — and because the Israeli public is not really concerned, there is no public pressure on the government to change anything.” https://www.ft.com/... via @MehulAtLarge Kabir Taneja / @kabirtaneja : Good piece by @MehulAtLarge on the very thin lines between commercial security and defence companies and the foreign policy interests of the state in Israel. https://www.ft.com/... Karen Melchior / @karmel80 : Israel has for years ignored calls by a UN Rapporteur on the Freedom of Expression, and others, to place a moratorium on the sales of spyware and to regulate it more closely. https://giftarticle.ft.com/... @johnreedwrites : A solid and on-point analysis by the @FT's @MehulAtLarge about NSO's spyware and the relationship between the company and the Israeli state. https://giftarticle.ft.com/... Avi Asher-Schapiro / @aaschapiro : “NSO has hired big name western advisers, including Tom Ridge, the former secretary of homeland security, and briefly, Juliette Kayyem, an assistant secretary...Its current PR offensive is being led by the ex-chief censor of the Israeli military.” https://www.ft.com/...
Context & Ripple Effects
The FT report reframes what earlier coverage treated as a commercial story: the hundreds of millions in Gulf-state deals Haaretz detailed last year were not just revenue for NSO — because Pegasus is classified as a weapon requiring an Israeli export license, each sale was also a decision by Jerusalem about which relationships to deepen. The same week this piece ran, Snowden called for a spyware trade ban, arguing the industry sells only "the virus" — a direct challenge to the licensing model the article describes.
First-order effects
- Israel's export-license authority turns every prospective NSO sale into a diplomatic instrument: approving or withholding a license is now equivalent to extending or denying a favor to a foreign government, which is why the Gulf deals moved so fast.
- Buyers named in later reporting — the CIA, UAE, Mexico and Saudi Arabia per the 2022 investigation into Pegasus's widespread government use — obtained the tool through exactly this state-mediated channel.
Second-order effects
- US sanctions on NSO have not stopped government spyware use — the DEA secretly deployed Graphite despite the sanctions — pushing Washington instead to reshape the market toward vendors selling only to the US and its allies, like Israeli startup Paragon.
- Rival vendors now compete partly on political alignment: being licensed by a friendly government becomes the product feature, not just the hacking capability.
Third-order effects
- If the pattern holds, offensive spyware settles into the structure of the traditional arms trade — export-controlled, state-brokered, and deployed as diplomatic currency — with regulation lagging, as Karen Melchior notes Israel has ignored UN Rapporteur moratorium calls for years.
- The likely endpoint is a bifurcated market: one bloc of Western-aligned licensed vendors and a grey zone where demand from unaligned buyers persists regardless of sanctions, keeping pressure on export-control regimes designed for conventional weapons.
The trend: Commercial spyware is consolidating into a state-licensed trade where export approval itself is the geopolitical lever, prefiguring how governments will govern access to other strategic technologies.