The CIA is opening a venture capital company in Silicon Valley to keep pace with the latest developments on the Internet.
The spy agency is concerned that it is lacking expertise in the application of the Internet to intelligence-gathering and has decided to invest $150 million on the latest information technology.
The news has leaked out before the official announcement. The company will be named In-Q-It. The "Q" refers to the white-coated boffin in the James Bond films who supplied Agent 007 with the latest gadgetry to ensure messy ends for his foes.
The company will soon open an office with a staff of 25 in Palo Alto, California, in the heart of Silicon Valley. It will fund hi-tech ventures with other venture capital companies and also hire contractors for experimental work.
Areas where the CIA wants to keep abreast of the latest technology include Internet search engines, better ways to visualise data and tighter security for CIA agents surfing the Web.
The chief executive of the CIA company is Mr Gilman Louie, a Chinese-American who made his reputation inventing video games, including the highly popular Falcon air combat simulator.
Mr Louie (39) told the New York Times: "The technology world has totally changed, and one day the CIA woke up and realised they needed to go through the same change." He said none of the company's work would be classified as top secret. In contrast to its other activities, the CIA would make the activities of In-Q-It highly visible.
"There is a tremendous information explosion today. As a result the agency was always one step behind," said Mr John McMahon, a former CIA deputy director and a board member of the new company. "The agency got the idea that what it needed was something that would not only appreciate its needs but be an umbilical cord that was plugged into the brightest minds in the Valley."
This new open approach contrasts with past efforts by the CIA to tap into the latest technology in the private sector by setting up shell companies which concealed their intelligence links.
Companies on the board of InQ-It will include Xerox, Lockheed Martin and Goldman Sachs. Also on the board will be Mr William Perry, former US defence secretary. Alex Brown, the investment bank which helped launch Microsoft and Sun Microsystems, will also be involved.