NSO has defended itself by saying that it builds tools and does not control what foreign governments do with them, and that it has continued to operate its business as normal.
The sequence of revelations in 2021, however, has hit it differently.
The company has lost millions of dollars in sales because of the NSO Affair. Reports of widespread abuse made headlines around the world, but the company says the allegations are not based on a standard database of phone numbers.
The company has been affected more by the US sanctions than previous scandals. Wall Street is shunning NSO and treating it as a distressed asset, while the company's newly appointed CEO quit just a week after being appointed.
Practical restrictions on how the company can operate are created by the sanctions. It can't legally purchase many of the tools it uses to develop exploits, such as laptops with a Windows operating system or iPhones, without explicit approval from the government of the United States. The US has said that it will be negative on sales to NSO Group.
The US decision is having a bigger impact on the company. Several people who spoke to MIT Technology Review on condition of anonymity said that employees are devastated and confused by low Morale. If NSO can't get off the US entity list, there is a lot of doubt about its future.
There are strategic problems.
The situation has been complicated by NSO's links to Israeli leadership. NSO Group has a very close relationship with the government of Israel and has been used as a political and diplomatic tool over the last decade. People with knowledge of the sale say Benjamin Netanyahu, then the Israeli prime minister, specifically urged on the deal when NSO Group began selling hacking tools to the United Arab Emirates government.
NSO's hacking technology was highly coveted by countries around the region, and was a key factor in Israel's plan to develop closer relations with its neighbors. The United Arab Emirates is one of the countries that have been used as a deal sweetener.
