Pegasus spyware maker NSO Group is reportedly running out of cash following actions by both the US government and Apple. This has led the company to explore options to put itself up for sale.

Two US funds have expressed an interest, claiming that they would change the company’s mission from offensive to defensive, though skepticism has been expressed about this …

Background

Our brief guide explains NSO’s current business model.

NSO Group makes spyware called Pegasus, which is sold to government and law enforcement agencies. The company purchases so-called zero-day vulnerabilities (ones that are unknown to Apple) from hackers, and its software is said to be capable of mounting zero-click exploits – where no user interaction is required by the target […]

NSO sells Pegasus only to governments, but its customers include countries with extremely poor human rights records – with political opponents and others targeted.

The company has come under increasing scrutiny since an Amnesty International exposé. The US government subsequently named the company as a national security risk, banning the import and sale of its spyware.

Apple followed this by suing the company for breaching the privacy of iPhone users, and began checking iPhones for signs of compromise by Pegasus, notifying owners that they appeared to have been targeted,

Pegasus spyware maker NSO in financial trouble

Bloomberg reports that the company is now running out of cash, and is exploring exit options.

NSO Group Ltd., the scandal-plagued spyware company that’s in danger of defaulting on its debts, is exploring options that include shutting its controversial Pegasus unit and selling the entire company, according to people familiar with the matter.

Talks have been held with several investment funds about moves that include a refinancing or outright sale, said the people, who asked not to be identified as the discussions are private.

The report claims that Pegasus would be repurposed, from hacking smartphones to protecting them.

The prospective new owners include two American funds that have discussed taking control and closing Pegasus, one of the people said. Under that scenario, the funds would then inject about $200 million in fresh capital to turn the know-how behind Pegasus into strictly defensive cyber security services.

However, TNW notes that this reported plan to develop a security product is being met with skepticism.

Major tech companies, including Meta and Apple, have sued the Israeli company for exploiting their platforms and snooping on people. So it’s hard to trust this kind of product in a defensive avatar. Plus, there will likely be some suspicion of the presence of backdoors being built into its new products.

Ronald Deibert, the director of Canada-based research firm Citizen Labs, warned that we should look out for corporate rebranding of the product.

‘Warning: don’t believe the hype about “defensive” products. Who’d trust that company with defence? Watch out for corporate rebranding too.’

It’s not often we’d hope for a business to fail, but we’ll make an exception here.

Photo: Mikhail Fesenko/Unsplash

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Ben Lovejoy

Ben Lovejoy is a British technology writer and EU Editor for 9to5Mac. He’s known for his op-eds and diary pieces, exploring his experience of Apple products over time, for a more rounded review. He also writes fiction, with two technothriller novels, a couple of SF shorts and a rom-com!

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