Over the last several years, U.S. policymakers have been engaged in a high-stakes game involving advanced technology, with the goal of keeping such tech out of the hands of our global adversaries.
America has implemented strict policies to restrict access to the most advanced technology lest it reach industries in nations like China, Iran, and Russia. In Russia’s case, sanctions have ramped up following the Ukraine invasion with much fanfare.
However, a recent acquisition of a U.S. company by a foreign entity with troubling and obscure ties to a sanctioned Russian oligarch demonstrates how complicated this game is and how important it is for the U.S. government to get it right.
Earlier this year a Massachusetts-based company called Desktop Metal, a leader in 3D printing technology, announced plans to be acquired by an Israeli company called Nano Dimension, which specializes in additive manufacturing. In August, the company filed an acquisition notice with The Committee on Foreign Investment in the United States, (CFIUS) which is tasked with screening foreign investments for potential national security risks. Given the dual-use potential of 3D printing technology in both civilian and military applications, the committee will thoroughly investigate Desktop Metal’s acquisition.
CFIUS has become busier--and its role has changed somewhat--as U.S. relations with both China and Russia have worsened. In 2018 Congress expanded CFIUS’s mandate in response to increased Chinese investment in American tech sectors. In 2022, President Joe Biden issued enhanced criteria for identifying and addressing national security threats.
Connections between Nano Dimension’s leadership and sanctioned Russian oligarchs raise questions about the potential for Russian influence and potential access to sensitive U.S. technologies. As CFIUS examines this acquisition--which will likely extend into 2025--it must consider the risks posed by foreign control over critical U.S. technology.
At the crux of this transaction is Nano Dimension’s CEO, Yoav Stern, and his longstanding relationships with Andrew Intrater and Yaron Eitan, both of whom are closely linked to the sanctioned Russian oligarch Viktor Vekselberg. Vekselberg merged his firm with fellow sanctioned Russian billionaire Oleg Deripaska in 2007 and sold his stake in the Russian oil firm TNK-BP to state-owned Rosneft in 2013 for $7 billion.
Under Stern’s leadership, Nano Dimension acquired the Israeli artificial intelligence company DeepCube in 2021, where Intrater (who happens to be Vekselberg’s cousin) served as a key executive. Intrater has faced allegations of assisting his cousin in evading U.S. sanctions. In acquiring DeepCube, Nano Dimension allowed Intrater and Eitan to obtain shares and voting rights within the company through Anakhnu LLC, DeepCube’s parent entity.
Stern and Eitan first worked together at DVTEL, a company Eitan founded and sold to an American company in 2015. Stern brought Eitan onto Nano Dimension’s board shortly after his own appointment as CEO in 2020, and this close association with Eitan and Intrater raises questions about Nano Dimension’s governance. Allowing the acquisition to proceed without thorough scrutiny could pose national security risks.
Nano Dimension’s DeepCube acquisition through Delaware-based Anakhnu LLC, which was founded just two months before U.S. sanctions against Russia were enacted in 2018, raises serious questions about sanctions evasion. Intrater’s affiliation with Vekselberg has prompted scrutiny from the Treasury Department, and Anakhnu’s operations and ownership structure remain opaque.
Desktop Metal’s 3D printing capabilities have implications beyond commercial use: The technology is becoming increasingly important in the defense and aerospace sectors, with potential uses in producing weapons components, complex machinery, and high-tech prototypes. The risk that such technology could be misappropriated by adversaries is a concern for the U.S. government.
By controlling Desktop Metal, Nano Dimension could obtain U.S. intellectual property with potential defense applications. CFIUS must assess the risk of this technology being funneled to foreign actors who could use it to bolster military capabilities. The United States risks empowering its adversaries through its own technological advancements.
The Nano Dimension-Desktop Metal deal illustrates the need for a proactive and vigilant approach to foreign acquisitions. While CFIUS has always played a vital role in protecting U.S. interests, the expanding influence of authoritarian states and the complexity of the modern technological landscape require a higher level of scrutiny, which the Biden Administration has attempted to ensure. Any foreign acquisition involving additive manufacturing and artificial intelligence must be approached with caution.
CFIUS has a lot of information to sift through before making a decision over the acquisition of Desktop Metal, and it is possible that Nano has committed to take steps to ensure that the technology it is acquiring will remain out of the hands of any U.S.--and Israeli--adversaries. But it is important that CFIUS ensure that this is done before giving its approval.
