Edward Snowden NSA Scandal Risks $35bn US Tech Sales

The US National Security Agency spying scandal may cost US companies $35bn worth of sales over the next two years as foreign investors start to doubt the security of information on their systems.

According to a Washington-based policy research group, Information Technology & Innovation Foundation, the surveillance scandal has already dented revenue and any setback in the US push to maintain an open Internet also could inflict indirect damage on global giants such as Apple and Google.

Meanwhile, Rebecca MacKinnon, a senior fellow at policy group New America Foundation said the potential fallout is "pretty huge given how much our economy depends on the information economy for its growth."

Edward Snowden, the ex-NSA contractor, originally earlier leaked top secret documents about a global programme of surveillance by Washington and has led to multiple political fallouts.

The documents revealed that the NSA has been tapping telephone conversations and spying on the internet activity of citizens, leaders, bureaucrats, businesses and government agencies.

The world's largest computer- networking equipment maker, Cisco, already revealed this month that revenues would fall by 10% in the ongoing quarter, and the drag would continue beyond the middle of 2014, following the scandal.

Revenues in Cisco's five emerging markets declined by 21%, led by a 30% fall in Russia, a 25% drop in Brazil and an 18% drop in both Mexico and China.

Mistrust from China?

The Chinese government's official Shanghai Securities News earlier reported that the Ministry of Public Security and a cabinet-level research centre are preparing to investigate Cisco's rivals IBM, Oracle and EMC following revelations that the NSA hacked critical network systems at certain universities in China and Hong Kong.

Policy groups are now reporting that tech companies are already facing the wrath of mistrust.

According to the Information Technology & Innovation Foundation, the cloud computing market will be valued at $207bn by 2016, however a survey by the Cloud Security Alliance showed that 10% of its non-US members have cancelled contracts with US-based cloud providers since May.

The survey also revealed that 56% said they'd be less likely to use one.