Pegasus Spyware Founder Warns Governments to Ditch US AI

The architect of Pegasus pivots to AI defense

Shalev Hulio spent years at the center of international outcry as the co-founder and former chief executive of NSO Group, whose Pegasus software weaponized zero-click exploits against activists, journalists, and heads of state. The fallout eventually landed the firm on the US Department of Commerce blacklist.

Now leading Dream, an AI cyber defense startup co-founded in 2022 with former Austrian chancellor Sebastian Kurz, Hulio has flipped his focus. In an interview with the Financial Times, he warned that relying on Silicon Valley infrastructure creates an unacceptable geopolitical liability.

"Every government should have their own model," Hulio told the FT. "They should not take the risk that somebody will wake up one day and shut their model because AI is a critical infrastructure. You want to control your own AI."

Dream cyber defense: funding, valuation, and footprint

Why sovereign AI is replacing cloud dependencies

The push for sovereign AI reflects a hard reality: state secrets cannot safely live behind foreign application programming interfaces. If diplomatic ties fray or export rules shift, a nation dependent on American cloud servers could lose access to critical defense workflows overnight.

Dream is actively positioning itself around that risk. The startup gained prominence after detecting an autonomous cyberattack where Chinese hackers chained vulnerabilities to breach Taiwanese government systems, including its nuclear safety agency.

Rather than pitching massive foundation models, Hulio argues defense needs small, local computation. Dream builds custom models trained solely on an agency's data to run on standard server hardware.

"We are saying to entities within the government, you should have a very narrow but very smart model that can run very fast on one or two or three GPUs," Hulio said. That approach eliminates ballooning cloud bills while keeping sensitive data off public networks.

A $3 billion pitch to foreign capitals

Capitals outside Washington are buying into the premise. Dream has raised $400 million, reached a $3 billion valuation earlier this year, and signed contracts with more than a dozen governments across Europe, Asia, and the Middle East.

The move matches wider defense trends. Initiatives like the UK AI biosecurity lab show how state agencies demand direct oversight over sensitive models instead of blind reliance on commercial vendors.

Hulio remains defiant about his NSO past, arguing his prior relationships give him direct insight into how ministries run. Whether allied nations will look past his surveillance background to secure their digital independence is now the real test.

Availability and pricing

Dream sells strictly to national security agencies, state intelligence services, and government ministries across Europe, Asia, and the Middle East. It offers no commercial enterprise tiers or consumer products.

Pricing is negotiated through bilateral government contracts based on bespoke model training and operational deployment scale.

As offensive cyber tools automate, expect more capitals to trade the broad fluency of frontier cloud models for the absolute security of running narrow models on their own isolated silicon.