The SQUID was developed by the government for covert surveillance and military/police training purposes according to the film. Somewhere along the line, they adapted the technology, allowing users to control actual living (albeit empty) entities for alien colonization.
The presence of SQUID technology in the late 1990s makes all the advanced technology in Dark Angel
(such as Manticore's genetic engineering tech) seem more plausible for the early 2020s. The societal conditions in Dark Angel
could also easily be seen as the logical extension of those in Strange Days
; it's not hard to imagine America limping along as it was in the film for another ten years before the Pulse finally pushed it over the edge.
shows the initial development of the SQUID sensorium-recording technology as well as the government's interest in it. Early in Strange Days,
it is mentioned that the technology first appeared as a replacement for the standard concealed recorders used by police.