OpenAI Backs BCI Startup to Challenge Musk’s Neuralink

OpenAI’s ventures arm is expected to lead a $250 million round for Merge Labs as Altman and Musk take their rivalry inside the brain.

Sam Altman is co-founding a brain–computer interface startup designed to compete with Elon Musk’s Neuralink, with OpenAI’s ventures team expected to lead a $250 million raise for Merge Labs, a move first detailed in a report on Merge Labs’ funding plan, according to the Financial Times. The bid escalates a long-running feud into a hardware-plus-AI contest over how humans will interact with machines. Talks are early. But the stakes are clear.

Merge is targeting an ~$850 million valuation. Altman will help launch the company alongside Alex Blania, who runs World (the eyeball-scanning digital ID project), yet he won’t invest personally or run day-to-day operations. That signals an institutional bet by OpenAI rather than a side project by its CEO. It also keeps governance simpler. For now.

A new front in a familiar fight

Altman and Musk co-founded OpenAI in 2015. Musk left in 2018 after clashing over direction and has since launched xAI while attacking OpenAI’s nonprofit conversion in court. Their public sparring on X keeps the drama alive. The business logic runs deeper. Each wants influence over the chokepoints of an AI economy. Interfaces are chokepoints. So are models, chips, and data. This is about control.

Neuralink has the head start: years of R&D, regulatory engagement, and early human trials. The company raised roughly $650 million this year at a ~$9 billion valuation and says multiple people with severe paralysis are already using its implant to control devices. Those numbers won’t be easy to chase. But they set a bar.

Why now: AI makes BCIs more useful

Brain implants are not new. Deep brain stimulation has treated Parkinson’s and epilepsy for decades. What changed is the software. Modern AI improves signal decoding, reduces latency, and enables higher-level intent recognition. Meanwhile, sensors and electronics have gotten smaller and more power efficient. Put together, the utility curve bends upward. Timing is not accidental.

Altman has been public about “the merge” for years, arguing that high-bandwidth interfaces would eventually narrow the gap between human intent and machine action. He sees BCIs as both assistive tech and, eventually, an augmentation layer for knowledge work. That’s the bet Merge aims to operationalize. It’s ambitious. It’s also crowded.

The field Merge enters

Beyond Neuralink, rivals like Precision Neuroscience and Synchron are pursuing different surgical and regulatory paths. Some approaches prioritize minimally invasive hardware; others chase bandwidth even if it requires more aggressive implantation. The market itself is bifurcating: medical restoration first, consumer enhancement later. Revenue today is small; long-term estimates run big. Forecasts of a future multihundred-billion market mask a near-term reality of clinical milestones and burn rates. Hardware is hard.

Regulation looms over everything. FDA approvals, human-subject protections, and post-market surveillance will define pace more than venture dollars alone. Neuralink’s progress clarifies the pathway, but it doesn’t simplify it. Safety events, device reliability, and explant procedures will shape public trust. One mishap can set the entire category back. That risk is real.

OpenAI’s stack strategy

Viewed from OpenAI’s seat, Merge fits a broader portfolio logic. Altman has backed energy (Oklo, Helion) to power compute, identity (World) to govern access, and now interfaces to capture intent. Each investment targets a bottleneck around AI scale: energy, trust, and I/O. A ventures-led deal keeps optionality: OpenAI gets a seat near the interface layer without absorbing hardware execution risk. If BCIs become the next default input, OpenAI wants influence over that surface. If not, the exposure remains limited. It’s a hedge and a probe.

The partnership could also create technical leverage. OpenAI’s models improve with richer, cleaner input signals; BCI vendors benefit from better decoding and intent prediction. Joint work on privacy, edge inference, and latency could matter more than cap tables. Throughput wins here. So does reliability. The user will not tolerate misfires.

What could go wrong

Plenty. The science may advance slower than the hype. Surgical risk, cost, and ethics could bottle up consumer use for years. Data governance will be under a microscope: who owns neural data, how it’s secured, and whether it becomes adtech’s next frontier. Even in medicine, reimbursement and clinician adoption decide outcomes as much as engineering does. Merge must pick a first market carefully. Start narrow. Prove value. Then expand.

And the deal itself is not done. Early-stage talks can shift, shrink, or fall apart. Valuation, control rights, and technical milestones will all be negotiated. The rivalry makes headlines, but execution will decide the scoreboard. No one gets a pass on hardware.

Why this matters

• Interfaces decide who controls access to AI. If BCIs mature, today’s platform power could shift to whoever owns the brain-to-model gateway.
• A credible challenger to Neuralink speeds the field and tests governance models for neural data, safety, and commercialization.

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