China’s brain-computer interface industry is moving forward

While Elon Musk’s Neuralink likes to say it’s a “pioneer” in brain-computer interfaces (BCIs), China’s BCI industry is already quietly moving from research to expansion.

A new wave of startups is racing to commercialize both implantable and noninvasive BCIs, buoyed by stronger political support, expanding clinical trials, and growing investor interest. So says Phoenix Peng, who founded not one, but two BCI startups. He is the co-founder of NeuroXess, a manufacturer of BCI implants, as well as the founder and CEO of non-invasive ultrasound BCI startup Gestala.

His belief in the potential of this market is based on concrete actions: provinces such as Sichuan, Hubei and Zhejiang have already set prices for BCI’s medical services, accelerating its inclusion in the national medical insurance system.

Over time, the technology is expected to extend beyond medicine to “cure diseases” to “human enhancement.”

“I have always maintained that neuroscience and AI are two sides of the same coin,” Peng said. “They are destined for deep integration, realizing direct, high-bandwidth connections between the human brain and AI. The human-to-human interface will be the ultimate bridge between carbon-based and silicon-based intelligence. While this may seem far-fetched, it represents an unimaginably vast market in the future.”

Four factors drive BCI in China

But over the next three to five years, BCI use will likely remain focused in healthcare, with the market reaching the multi-billion-dollar range as insurance coverage expands, Peng told TechCrunch.

In August 2025, the Chinese Ministry of Industry and six other agencies issued a national roadmap to further accelerate the development of human-to-human interfaces. The plan targets major technology milestones by 2027, common industry standards, and a complete supply chain by 2030, with the aim of building globally competitive BCI companies and supporting smaller, specialized companies.

Asked what drives China’s rapid progress on BCI, Peng told TechCrunch that it comes down to four factors. The first is strong political support, with cross-departmental cooperation working to harmonize technical standards and medical reimbursement. In December, at the 2025 Shenzhen Human-Computer Interface Expo, China announced an 11.6 billion yuan ($165 million) brain science fund to support human-computer interface companies from research to commercialization.

The second factor is the vast clinical resources, including large patient groups and low research costs that accelerate trials. National health insurance in China means faster commercialization once the country approves the device. This is compared to the United States, where even after the FDA approves a device, private insurers, as the primary payers, must do so separately. Europe is known for implementing the strictest consent standards in healthcare technology, with an emphasis on regulating data privacy.

Researchers have completed the country’s first fully implantable wireless BCI trial — and only the second in the world — allowing a paralyzed patient to control the devices without external devices, according to CGTN. Neuralink is the startup that has completed the first trial of this kind.

“In traditional electrical BCI devices, Chinese companies have made clinical progress in movement and language decoding, spinal cord reconstruction, and stroke rehabilitation, with more than 50 flexible implantable BCI clinical trials completed by mid-2025,” Peng said, adding that next-generation efforts are now moving toward whole-brain neural decoding and encoding, including ultrasound-based methods such as Gestala technology.

The third factor, Peng points out, is China’s mature industrial manufacturing, which includes semiconductors, artificial intelligence, and medical devices, which support rapid R&D and prototyping. Finally, there is strategic investment in the market, with both state-led funds and private capital rising under national initiatives.

Some recent major deals include Shanghai-based BCI startup StairMed Technology, which raised $48 million (350 million yuan) in Series B funding in February 2025. BrainCo, a neurotech company developing non-invasive BCIs and bionic limbs, has also quietly filed for an IPO in Hong Kong, according to reports, after raising $287 million (2 billion yuan) earlier this year. He told us that Ping’s company Gestala, which was launched in January, is in talks with investors to close a funding round soon.

After all, BCI startups in China are stepping up their efforts to challenge US leaders such as Neuralink, Synchron, and Paradromics. The most active players in China include NeuroXess, Neuracle, NeuralMatrix, BrainCo, Bo Rui Kang Tech, Aoyi Tech, Brainland Tech, and Zhiran Medical. They span approaches from flexible implantable interfaces to non-invasive brain and computer technologies.

This means that China’s BCI market is expected to grow to more than $530 million (3.8 billion yuan) in 2025, up from 3.2 billion yuan in 2024, according to media reports, with forecasts suggesting the market will be worth more than 120 billion yuan by 2040.

Types of BCI

BCIs take two routes. The first are invasive electrophysiological BCIs such as NeuroXess and Neuralink that implant electrodes in people’s brains to obtain precise signals at the neuron level. But this type comes with risks of surgery. The second type is non-invasive systems like NeuroSky and BrainCo that trade some precision for safety and ease of use.

This field is now expanding further, with the emergence of new methods – including ultrasound, magnetoencephalography, transcranial magnetic stimulation, optical methods, and hybrid brain-to-brain interfaces – giving researchers new tools to read and influence brain activity.

Startup founders also hope non-invasive technology will help overcome barriers to adoption. Not everyone is willing to undergo brain surgery to have a device implanted in their head.

Ultrasound BCI devices from companies like OpenAI-powered Merge Labs and Gestala target highly prevalent conditions such as chronic pain, stroke, and depression. As non-invasive solutions, these technologies are more easily accepted by patients and offer much greater commercial scalability.

Gestala, for example, expects to launch its first-generation product by the third quarter, its founder said. Early clinical trials have shown promising results: One session reduced pain scores by 50%, with effects lasting one to two weeks, Peng noted.

HongShan Capital, formerly known as Sequoia China, has invested in Zhiran Medical, a 2022-founded startup focused on improving the long-term performance of implants. The company uses flexible, high-throughput electrodes to reduce inflammation and signal loss associated with rigid implants.

“Some technologies may seem advanced but are far from practical,” Yang Yunxia, ​​a partner at Hongshan Capital, wrote in a blog post. While other projects appear commercially viable, they face “high costs” or significant technical hurdles, Yuenxia stresses. The partner noted that investment decisions ultimately depend on whether the investor believes the product can be developed into a sustainable business.

coming years

Over the next five years, industry insiders expect China’s BCI regulations to align more closely with international standards, with a particular focus on regulatory approval and data sovereignty. Global frameworks developed by organizations such as IEC and ISO, along with guidance issued by the US Food and Drug Administration (FDA), are expected to serve as key reference points.

Chinese regulators are also expected to tighten oversight of invasive devices, as well as the data generated by all BCI devices, while facilitating approval of non-invasive technologies.

As for the ethics facing devices implanted or manipulated in the brain, China plans to strengthen requirements for informed consent, expand ethics review beyond medicine, and move toward uniform technical standards for clinical evaluation.