Dream Security, an AI-focused cybersecurity firm co-founded by Shalev Hulio, the former head of NSO Group, has raised $260 million in a recent funding round that values the company at approximately $3 billion. The Tel Aviv-based startup, established three and a half years ago, has quickly expanded its presence in Europe by securing multiple government contracts aimed at defending against sophisticated cyber threats.

Hulio, who stepped down from NSO in 2022 following U.S. sanctions against the company, has repositioned his efforts from creating offensive surveillance tools to developing defensive technologies. While NSO Group gained notoriety for its Pegasus spyware, used by intelligence agencies to monitor targets covertly, Dream Security focuses on protecting governments and critical infrastructure from cyberattacks orchestrated by state actors such as China, Russia, North Korea, and Iran.

Drawing on advances in artificial intelligence and large language models, Dream's technology seeks to identify patterns that signal potential cyber intrusions. Hulio describes this approach as “AI vs AI,” emphasizing the need for defensive solutions that can counter increasingly sophisticated offensive cyber capabilities. He highlighted the importance of “sovereign AI” — the ability of nations to develop and control their own AI infrastructure without depending on foreign technology providers — as a critical component in maintaining national security.

The funding round drew investments from Bicycle Capital and Group 11, underscoring investor confidence in Dream’s business model amid a shifting geopolitical landscape. Hulio has expressed interest in expanding Dream’s footprint in the United Kingdom, though his company’s Israeli origins and his own past with NSO Group could elicit scrutiny in Western markets. For context, other technology firms like Palantir have faced political resistance in the UK due to concerns over their ties and operations.

Dream’s co-founder and president is Sebastian Kurz, the former Austrian chancellor known for his hardline immigration policies. After leaving political office, Kurz joined Thiel Capital, linked to billionaire Peter Thiel, a co-founder of Palantir. Their involvement further nuances the company’s profile at the intersection of geopolitics, technology, and security.

Hulio has defended the controversial history of NSO Group and the Pegasus software, denying allegations that his former company was involved in high-profile surveillance incidents, such as the targeting of French President Emmanuel Macron or associates of journalist Jamal Khashoggi. He maintains that NSO developed Pegasus technology initially in cooperation with German intelligence agencies to combat criminal activity, countering criticism by emphasizing the intended defensive use of the product.

As cybersecurity emerges as a decisive factor in global power dynamics, Hulio argues that data protection will soon surpass traditional military hardware in strategic importance. “Countries that best deploy AI and quantum computing, and who safeguard their data as fiercely as their borders, will dominate the future,” he said.

With Dream Security positioning itself at the forefront of AI-driven cyber defense, investors and governments are watching closely to see if the company can navigate the complex ethical and political challenges inherent in this high-stakes sector.