OpenAI invested in brain-computer interface startup Merge Labs this week, participating in a $252 million seed round that values the company at $850 million. The AI giant described brain-computer interfaces as "an important new frontier" that will create natural ways for humans to interact with AI.
Merge Labs, co-founded by OpenAI CEO Sam Altman, emerged from stealth on Thursday with backing from Bain Capital and Valve co-founder Gabe Newell. Sources familiar with the deal confirmed OpenAI wrote the largest single check in the funding round, which reportedly totaled between $250-252 million.
The startup aims to develop non-invasive BCIs that connect with neurons using molecules instead of electrodes, transmitting data via ultrasound to avoid brain tissue implants. This approach contrasts with Neuralink's surgical implantation method, which requires removing skull sections to insert electrode threads.
Neuralink raised $650 million at a $9 billion valuation in June 2025, focusing on medical applications for paralysis patients. Merge Labs targets broader consumer applications alongside healthcare uses, envisioning BCIs that combine biology, devices, and AI for gaming, productivity, and human enhancement.
Morgan Stanley estimated in October 2024 that the total addressable market for BCIs reaches $400 billion in the US alone, primarily for medical applications. The investment comes as OpenAI faces significant financial pressures, with $1.4 trillion in infrastructure commitments and projected operating losses of $74 billion in 2028 before turning profitable in 2030.
OpenAI stated it will help Merge Labs build "scientific foundation models and other frontier tools," extending its 2024 program for custom LLM development. The startup plans to create an AI operating system capable of interpreting brain activity data, using machine learning to accelerate neuroscience research.
The BCI market includes competitors like Paradromics, Synaptrix Labs, and Synchron, which focus on both invasive and non-invasive approaches. Facebook shelved its brain-reading BCI research project in 2021 to concentrate on wrist-based electromyography for its Meta Reality Labs division.
Merge Labs acknowledges its technology may require "decades rather than years" to develop fully. The company originated as an internal project at Forest Neurotech, a nonprofit research group that developed ultrasound-based brain imaging technology called Forest-1.
OpenAI recently issued a request for proposals seeking US manufacturing partners for hardware programs in consumer electronics, AI data centers, and robotics. The company also collaborates with Broadcom on custom silicon development and former Apple designer Jony Ive on consumer hardware devices.
Industry analysts suggest BCIs could eventually expand beyond medical applications into consumer, workplace, and military uses. Thomas Oxley, CEO of Synchron, noted that while healthcare remains the near-term focus, broader adoption could follow without requiring surgical procedures.
