The Internet Heist
DARPA Built It. The CIA Funded Google. Silicon Valley Owns $11 Trillion of What You Paid For.
THE ENDLESS FRONTIER: Public Money, Private Empires — Post 4 | February 2026
"Different Frontier. Same Extraction. Since 1850."
Post 1: The Pattern — 200 years, one mechanism
Post 2: The Railroad Theft — 175 million acres, the birth of extraction
Post 3: The Oil Extraction — The 1872 law still giving away public resources today
Post 4: The Internet Heist ← YOU ARE HERE
Post 5: The Defense Machine — 70 years of cost-plus contracts
Post 6: The Space Grab — The biggest extraction in human history, happening now
Post 7: The Same Players — How public wealth compounds into private dynasties
Post 8: What Breaks the Cycle — Three attempts, one possibility
How the Public Built the Internet (The Part Silicon Valley Doesn't Mention)
The origin story Silicon Valley tells about itself: brilliant entrepreneurs in garages, taking risks, building the future through innovation and hard work.
The documented history:
1958: President Eisenhower — the same president who would warn about the military-industrial complex three years later — creates ARPA (Advanced Research Projects Agency) in response to Sputnik. Its mission: develop technologies beyond immediate military needs. Its budget: public tax dollars.
1966: ARPA's Bob Taylor initiates the ARPANET project to enable resource sharing between remote computers. Taylor appoints Larry Roberts as program manager. Public funding. Public mission. Public employees.
1969: ARPANET goes live. The first computer-to-computer message is sent between UCLA and the Stanford Research Institute on October 29, 1969. Four nodes. The beginning of the internet. Entirely publicly funded. Built by government contractors paid with defense appropriations.
1973: DARPA-supported Vint Cerf at Stanford and Bob Kahn at DARPA develop TCP/IP — the fundamental communication protocol that makes the internet work. Cerf was working on contract for DARPA. The protocol was developed with public funding at a public university using public resources.
1983: TCP/IP becomes the standard for all military computer networking. The Department of Defense mandates it. The foundation of the modern internet is now a military standard, built with military funding.
1985-1991: NSF funds five national supercomputing centers and builds NSFNET — the national backbone network. NSF funds local and regional networks to connect universities and research institutions. The internet's physical backbone: publicly funded, publicly built, publicly operated.
1995: NSF shuts down its backbone. The internet is privatized. Control transfers from government stewardship to private custody.
— Britannica, Internet: Foundation of the Internet
"Private custody." That's Britannica's word for what happened. Not "partnership." Not "collaboration." Custody. The public built it. Private companies took custody of it.
The same word describes railroad land grants: the public funded the infrastructure, private companies took custody of the land. The same word describes Standard Oil: the public owned the mineral rights, private companies took custody of the extraction. Different frontier. Same transfer of custody.
1958: ARPA created (public)
Eisenhower creates DARPA to fund advanced research beyond immediate military needs
1966-1969: ARPANET built (public)
DARPA funds, designs, builds first computer network
First message: UCLA → Stanford Research Institute (Oct 29, 1969)
1973-1983: TCP/IP developed (public)
Vint Cerf (Stanford/DARPA contract) + Bob Kahn (DARPA) build internet protocols
1983: DoD mandates TCP/IP for all military networking
1985-1995: NSFNet backbone (public)
NSF funds 5 national supercomputing centers
NSF builds and operates national internet backbone
NSF funds regional and local networks connecting universities
ALSO PUBLIC:
• GPS satellite network (military, free to private use)
• University computer science departments (publicly funded)
• DARPA grants to Stanford, MIT, Carnegie Mellon, Harvard, UCLA
• NSF Digital Library grants (seeded Google directly)
• Intelligence community MDDS grants (funded Google’s core algorithm)
1995: PRIVATIZATION
NSF shuts down backbone. “Control devolved from government
stewardship to private custody.” — Britannica
WHAT PUBLIC SPENT: Billions over 25 years
WHAT PRIVATE CAPTURED: $11+ trillion in market cap
RATIO: Hundreds of dollars of private value per $1 of public investment
The CIA Funded Google (And Google Didn't Tell You)
This is the part of the internet story that doesn't appear in standard Silicon Valley histories.
In 1993, the intelligence community — CIA, NSA, and other agencies — published a white paper describing a research initiative called MDDS: Massive Digital Data Systems. The program's goal: fund research in managing and searching massive databases, specifically designed to help intelligence agencies process the growing flood of digital information.
The white paper stated explicitly: "The IC [Intelligence Community] is taking a proactive role in stimulating research in the efficient management of massive databases and ensuring that IC requirements can be incorporated or adapted into commercial products."
The mechanism: channel the funding through unclassified agencies like NSF so the research would appear civilian and could be scaled commercially if successful.
In 1995, one of the first MDDS grants went to a Stanford University computer science team with a decade-long history of NSF and DARPA grants. The grant funded research on "query optimization of very complex queries." A second grant — the DARPA-NSF digital libraries grant more commonly cited in Google's origin stories — was part of a coordinated effort to build a massive digital library using the internet.
Both grants funded research by two Stanford graduate students making rapid advances in web-page ranking and user query tracking: Sergey Brin and Larry Page.
The principal investigator for the MDDS grant later wrote explicitly: "Its core technology, which allows it to find pages far more accurately than other search engines, was partially supported by this grant."
The grant the principal investigator is referring to: the intelligence community's MDDS program.
Google's core search technology — the PageRank algorithm that makes it the world's dominant search engine — was built on research funded by the CIA and NSA.
Google's official response when this was reported: denial. The company told Wired magazine in 2006 that intelligence community funding claims were "completely untrue."
But DARPA's own Wikipedia page lists Google as a direct result of its funding. The principal investigator named Google explicitly. The research papers cite the grants. The documentation exists.
Google denied what the documents prove.
1993: Intelligence Community MDDS White Paper
“The IC is taking a proactive role in stimulating research in the efficient
management of massive databases and ensuring that IC requirements can be
incorporated or adapted into commercial products.”
— CIA/NSA MDDS Program, 1993
1995: MDDS grants to Stanford
• Grant to Stanford team with NSF/DARPA history
• Research: Query optimization of very complex queries
• Funded researchers: Sergey Brin and Larry Page
THE PRINCIPAL INVESTIGATOR’S WRITTEN CONFIRMATION:
“Its core technology, which allows it to find pages far more accurately
than other search engines, was partially supported by this grant.”
— Principal Investigator, MDDS grant, on Google
DARPA’S OWN RECORD (Wikipedia):
“ARPA CISTO and NASA funded the NSF Digital Library program,
that led, among others, to Google.”
— DARPA Wikipedia page
GOOGLE’S RESPONSE (2006):
“The statements related to Google are completely untrue.”
— Google spokesperson to Wired magazine
THE DOCUMENTS SAY OTHERWISE.
WHAT THIS MEANS:
• Google’s $2 trillion market cap built on intelligence-community-funded algorithm
• Technology designed to help CIA/NSA search massive databases
• Channeled through NSF to appear civilian
• Captured entirely as private intellectual property
• Public (and intelligence community) received: a search engine
• Larry Page and Sergey Brin received: $2 trillion in private wealth
Standard Oil used publicly-funded railroads for private monopoly.
Google used intelligence-community-funded algorithms for private monopoly.
Different frontier. Same extraction.
The Stanford-Silicon Valley Pipeline (Railroad Money to Google)
In Post 2, we documented that Leland Stanford — one of the primary beneficiaries of the railroad land grants of 1862 — used his railroad fortune to found Stanford University.
That connection is not metaphorical. It is financial and institutional:
1862: Pacific Railway Act grants Central Pacific Railroad (Stanford's company) millions of acres of public land.
1885: Leland Stanford founds Stanford University in memory of his son, using railroad fortune as endowment. University opens 1891.
Early 1900s onward: Stanford becomes one of DARPA's primary research partners. DARPA had "a close relationship with Carnegie-Mellon University, Harvard University, MIT, Stanford University, UCB, UCLA" from as early as 1968.
1975: The initial implementation of TCP/IP (the internet's fundamental protocol) occurs at Stanford, with Vint Cerf working on contract for DARPA.
1995: Stanford graduate students Brin and Page receive NSF/DARPA and intelligence community grants. Their research becomes Google.
1998: Google founded. Stanford receives equity stake in Google as part of licensing its PageRank patent. Stanford's technology licensing office earns $336 million from Google stock.
The full chain: Railroad land grants (1862) → Stanford fortune → Stanford University → DARPA research partner → Google founders → $2 trillion private market cap.
The wealth from Frontier 1 (railroads) funded the institution that produced the companies of Frontier 4 (internet). This is not coincidence. It is compound extraction across generations.
And Stanford is just one node in the network. DARPA's early relationships with MIT, Carnegie Mellon, Harvard, UCLA — all funded by public defense appropriations — produced the researchers, the patents, and the companies that became the internet economy.
1862: Railroad land grants → Stanford fortune
Pacific Railway Act → Central Pacific Railroad → Leland Stanford → $hundreds of millions
1885-1891: Stanford fortune → Stanford University
Railroad wealth endows university
Purpose: “Promote the public welfare by exercising an influence on behalf of humanity”
Reality: Became nexus of publicly-funded R&D capture
1968+: Stanford → DARPA research partner
DARPA close relationship with Stanford from earliest days
Billions in public research grants flow through Stanford
TCP/IP (internet foundation) implemented at Stanford (1975)
1995: DARPA/CIA/NSA grants → Brin and Page
Intelligence community MDDS + NSF/DARPA digital library grants
Fund Stanford graduate students developing web search algorithms
Research becomes: Google’s core technology
1998: Google founded
Stanford licenses PageRank patent to Google
Stanford receives equity in Google
Stanford earns $336 million from Google stock
2024: Google market cap = $2 trillion
THE FULL CHAIN:
1862 railroad land grants → 2024 Google $2T market cap
162 years. Public resources → private empire. Unbroken chain.
Different names at each step. Same mechanism throughout.
The Amazon Connection: From Public Internet to CIA to Space
Amazon's story is the most complete illustration of how frontier extraction compounds across generations — and directly connects the internet (Frontier 4) to space (Frontier 6).
The chain:
Amazon built on public infrastructure: Jeff Bezos founded Amazon in 1994 — one year before NSF privatized the internet backbone. Amazon was built entirely on publicly-funded internet infrastructure: DARPA's protocols, NSF's backbone, GPS (military) for logistics, publicly-funded university computer science research for its engineering talent base.
Amazon AWS captures the cloud: Amazon Web Services (AWS) launched in 2006, offering cloud computing services. By 2013, AWS had become the dominant cloud infrastructure provider in the world. That year, Amazon won a $600 million contract from the CIA to build cloud services for the intelligence community.
The circle closes: The CIA funded research (MDDS) that became Google in 1995. In 2013, the CIA paid Amazon $600 million to build its cloud infrastructure. Public intelligence money funded the algorithm that made Silicon Valley dominant. Then public intelligence money paid Silicon Valley to manage intelligence data.
Amazon funds Blue Origin: Bezos used Amazon profits — built on public internet infrastructure — to fund Blue Origin, his private space company. Blue Origin has received NASA contracts for lunar missions and space station development. Public internet infrastructure → private cloud monopoly → public intelligence contract → private space company → public space contracts.
The Bezos chain:
- DARPA/NSF internet (public) → Amazon (private, $2T market cap)
- Amazon AWS + CIA $600M contract (public) → Blue Origin (private)
- NASA contracts (public) → Blue Origin private space stations (private)
- One man. Three frontiers. All built on sequential public subsidies.
This is the "same players" pattern you identified. Not the same individuals across 200 years, but in Bezos's case — the same individual across three frontiers simultaneously, using each public subsidy to fund the next private capture.
FRONTIER 4 (INTERNET) → AMAZON:
• Built on: DARPA protocols, NSF backbone, GPS (military), public university CS research
• Amazon founded: 1994 (one year before internet privatization)
• Amazon market cap 2024: $2 trillion
• Public investment basis: Never disclosed, never compensated
FRONTIER 4 → INTELLIGENCE CONTRACT:
• 2013: Amazon AWS wins $600M CIA cloud contract
• Circle: CIA funded Google algorithm (1995) → CIA paid Amazon for cloud (2013)
• Public intelligence money: Funded the algorithm AND paid for the infrastructure
FRONTIER 6 (SPACE) → BLUE ORIGIN:
• Bezos funds Blue Origin with Amazon profits (built on public internet)
• Blue Origin receives NASA contracts (public money, Frontier 6)
• Blue Origin building private space stations (to replace $150B public ISS)
THE COMPLETE BEZOS CHAIN:
Public internet → Amazon ($2T) →
CIA contract ($600M) → Blue Origin →
NASA contracts → Private space stations
Public investment at each step. Private capture at each step.
One man. Three frontiers. Unbroken chain of public subsidy → private empire.
Vanderbilt-Rockefeller-Carnegie took three people across two frontiers.
Bezos does it alone across three frontiers in one lifetime.
The extraction is accelerating. The players are consolidating.
"From Government Stewardship to Private Custody": The Britannica Verdict
Britannica's history of the internet contains a sentence that deserves to be read carefully:
Three stages:
Government stewardship (1969-1985): DARPA and DoD build and operate the network. Public mission. Public control. Public funding.
Private-sector participation (1985-1995): NSF expands the network to universities and research institutions. Commercial networks begin to appear. Public still runs the backbone. Private companies begin operating on public infrastructure.
Private custody with government oversight and forbearance (1995-present): NSF shuts down the backbone. Private companies take "custody" of the network. Government retains "oversight" (the FCC) but exercises "forbearance" — deliberate restraint from intervening.
"Forbearance." That's the regulatory capture endpoint. Government builds infrastructure, transfers custody to private companies, then restrains itself from regulating what it transferred.
This is the railroad model perfected: government builds, transfers, restrains. The ICC captured by railroads became "forbearance." The FCC captured by telecoms became "forbearance." The FAA captured by space companies is becoming "forbearance."
The language evolves. The mechanism doesn't.
The Scale: $11 Trillion on a Public Foundation
Let's be precise about what private custody of the public internet produced:
- Google/Alphabet: $2 trillion market cap. Core technology funded by CIA/NSA MDDS grants and NSF/DARPA digital library grants.
- Amazon: $2 trillion market cap. Built on DARPA internet, GPS logistics, publicly-funded university engineering talent. CIA's largest cloud provider.
- Meta/Facebook: $1.4 trillion market cap. Built on publicly-funded university networks (Harvard's network, expanded to other universities). Used publicly-funded internet infrastructure for free.
- Apple: $3+ trillion market cap. iPhone built on publicly-funded touchscreen research (University of Delaware, NSF grants), GPS (military), cellular networks (public spectrum), internet (DARPA/NSF).
- Microsoft: $3+ trillion market cap. Built on publicly-funded university computer science research, publicly-funded internet infrastructure, publicly-funded software standards research.
Combined: $11+ trillion in private market value.
What did the American public receive for this foundational investment?
- Access to the internet (which the public built) — for a monthly fee
- Access to Google search — subsidized by surveillance of user behavior
- Access to Amazon — with Prime fees and marketplace fees extracted from every transaction
- Tax revenue — substantially minimized by companies with armies of tax lawyers
The public built the railroad. Private companies charged freight. The public built the internet. Private companies charge access fees and extract surveillance value.
Different infrastructure. Same model.
GOOGLE ($2T):
Public foundation: CIA/NSA MDDS grants + NSF/DARPA digital library grants
Core technology: “Partially supported” by intelligence community grants (principal investigator’s words)
Stanford’s $336M from Google stock: Funded by railroad land grants (1862)
AMAZON ($2T):
Public foundation: DARPA internet, NSF backbone, GPS (military), university CS research
CIA: $600M cloud contract (2013)
Blue Origin: Now receiving NASA contracts (public → private space)
META/FACEBOOK ($1.4T):
Public foundation: University networks (publicly funded), DARPA internet
Surveillance capitalism: Monetizes user data on publicly-funded infrastructure
APPLE ($3T+):
Public foundation: Touchscreen research (NSF/university), GPS (military),
cellular spectrum (public), internet (DARPA/NSF)
MICROSOFT ($3T+):
Public foundation: University CS research, internet infrastructure, software standards
TOTAL: $11+ TRILLION
Built on publicly-funded infrastructure
No royalties to the public
No profit-sharing with DARPA/NSF/military
No compensation to universities beyond patent licensing
WHAT PUBLIC RECEIVED:
• Monthly internet bills
• Search engines funded by behavioral surveillance
• “Free” services funded by data extraction
• Tax revenue (minimized by aggressive corporate tax strategies)
The railroads took 175 million acres. Silicon Valley took the internet.
The scale jumped from millions to trillions. The mechanism didn’t change.
Surveillance Capitalism: The Oil Model for the Digital Age
Standard Oil extracted value from public mineral resources and converted it to private profit. Silicon Valley extracted value from public internet infrastructure and converted it to private profit. But Silicon Valley added a new extraction layer that Standard Oil never imagined: extracting value from user behavior.
Harvard Business School professor Shoshana Zuboff named this "surveillance capitalism" — the systematic extraction of behavioral data from users, converted into predictive products sold to advertisers and others.
The mechanism:
- User accesses publicly-funded internet infrastructure (for a fee)
- User interacts with private platform (Google, Facebook, etc.) built on that infrastructure
- Platform captures all behavioral data (searches, clicks, purchases, movements via GPS)
- Platform converts behavioral data into advertising targeting (the product)
- Advertisers pay platform for access to users (the revenue)
- User receives: free search or social network (subsidized by their own data being sold)
This is a new extraction mechanism that didn't exist in previous frontiers. Rockefeller extracted oil. Vanderbilt extracted freight revenue. Silicon Valley extracts behavioral data — and converts it to advertising revenue at scale that dwarfs physical resource extraction.
Google's 2024 advertising revenue: $237 billion. Built on behavioral data extracted from users using publicly-funded internet infrastructure.
The user receives no compensation for the data extracted from them. The public receives no royalties for the infrastructure that makes the extraction possible. The platform receives everything.
This is the General Mining Act of 1872, applied to human attention and behavior. You own the resource (your behavior, your attention, your data). The platform extracts it. Pays you nothing. Keeps everything.
GENERAL MINING ACT 1872:
• Public resource: Minerals in federal land
• Extraction mechanism: Mining claims ($5/acre)
• Royalty to public: Zero
• Annual extraction: $2-3B from public land
• Who profits: Mining companies
SURVEILLANCE CAPITALISM (DIGITAL AGE):
• Public resource: User behavioral data (searches, clicks, purchases, location)
• Extraction mechanism: “Free” platforms (Google Search, Facebook, Gmail)
• Royalty to users: Zero
• Annual extraction: $237B (Google ads alone, 2024)
• Who profits: Platform companies ($11T market cap)
THE PARALLEL IS EXACT:
• You own the land (mineral rights): Public
• You own the behavior (your data): Individual users
• Company extracts without compensation: Both cases
• Regulatory protection for extractor: Both cases (1872 Act / Section 230)
• Reform attempts blocked: Both cases (37 years mining reform / tech regulation)
SCALE DIFFERENCE:
Mining: $2-3B/year from public land
Surveillance: $237B/year from Google alone
The digital mining act is 100x more profitable than the original.
And it extracts from individuals, not just public land.
What the Internet Heist Built (And Where It's Going)
The privatization of the internet in 1995 created five companies worth $11+ trillion. Those companies are now the infrastructure layer for the next frontier extraction:
Google (CIA/NSA-funded algorithm) → AI: Google DeepMind is building artificial general intelligence using publicly-funded foundational research in machine learning (most AI research was publicly funded through universities and DARPA before private companies scaled it). The AI extracted from public research will be monetized privately. Google's $2T market cap will grow to $5T+ if it captures AI.
Amazon (public internet + CIA cloud) → Space: AWS runs the cloud infrastructure for the U.S. government, military, and intelligence community. Blue Origin is building private space stations. Bezos uses Amazon profits to fund space extraction. Public internet → private cloud → public intelligence contracts → private space.
Microsoft (public CS research → OpenAI: Microsoft invested $13 billion in OpenAI — whose foundational research was supported by public funding. Microsoft is now building AI infrastructure that will be licensed back to the government agencies that helped fund the foundational research. Public research → private company → public licensing fees.
The internet heist didn't just extract $11 trillion. It created the platform companies that are now positioned to extract the next frontier — AI, space, and whatever comes after.
Each frontier is larger than the last. Each extraction enables the next. The compound interest of 200 years of public-to-private wealth transfer is accelerating.
In Post 5, we document the bridge between the railroad era and the internet era: the military-industrial complex. The defense contractors who used cost-plus contracts, revolving doors, and regulatory capture to extract hundreds of billions from public defense spending — and whose institutional model became the template for every extraction that followed.
KEY SOURCES FOR THIS POST:
Internet history: DARPA official history (darpa.mil), Wikipedia ARPANET, SRI International 75 Years, Defense Media Network DARPA perspective, Britannica Internet Foundation, Internet Society brief history. CIA-Google connection: Quartz investigative report (January 2025, by Jeff Nesbit, author and former NSF communications director), citing MDDS white papers, principal investigator publications, and research papers by Brin and Page. DARPA-Google link: Wikipedia DARPA page, listing Google as direct result of ARPA/DARPA funding.
ON THE CIA-GOOGLE CLAIM:
This is the most sensitive claim in this post. It is sourced to a Quartz investigation by Jeff Nesbit (January 2025) who served as director of legislative and public affairs at NSF and has direct knowledge of NSF grant programs. The principal investigator’s written confirmation — “Its core technology… was partially supported by this grant” — is the key primary source. Google denied the connection. The documents support the Quartz reporting. We present this as documented investigative reporting, not as proven fact in the legal sense. Readers should follow the original sources.
THE BEZOS CHAIN:
The Amazon → CIA → Blue Origin chain is documented: Amazon AWS CIA contract ($600M, 2013) is public record. Blue Origin NASA contracts are public record. The connection between them — Bezos using Amazon profits to fund Blue Origin — is Bezos’s own public statements about his space company funding. The chain is documented even if Bezos would not describe it the way we have.
WHAT COMES NEXT:
Post 5 (The Defense Machine) documents how the military-industrial complex created the institutional infrastructure — cost-plus contracts, revolving doors, regulatory capture — that all subsequent frontiers have used. Defense is the bridge between the 19th-century extraction model (railroads, oil) and the modern one (internet, space).

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