While Elon Musk’s Neuralink likes to say it’s a “groundbreaking” brain-computer interface (BCI), China’s BCI industry is already quietly moving from research to scale.
A new wave of startups is racing to commercialize both implantable and noninvasive BCIs, bolstered 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 BCI implant manufacturer, as well as the founder and CEO of non-invasive BCI ultrasound startup Gestala.
His belief in the potential of this market is based on concrete action: Provinces such as Sichuan, Hubei and Zhejiang have already set medical service prices for BCI, accelerating its integration into the national health insurance system.
Over time, he foresees the technology moving beyond medicine from “disease treatment” to “human augmentation,” he said.
“I have always argued that neuroscience and artificial intelligence are two sides of the same coin. They are destined for deep integration, realizing a direct broadband connection between the human brain and artificial intelligence. BCI will serve as the ultimate bridge between carbon-based and silicon-based intelligence. Although it may sound far-fetched, it represents an unimaginably large market in the future,” Peng said.
Four factors affecting BCI in China
However, over the next three to five years, BCI use is likely to remain concentrated in healthcare, with the market for expanding insurance coverage reaching the multibillion-dollar scale, Peng told TechCrunch.
In August 2025, China’s Ministry of Industry and six other agencies issued a national plan to further accelerate the development of BCI. The plan focuses on major technical milestones by 2027, common industry standards and a complete supply chain by 2030 to build globally competitive BCI companies and support smaller niche firms.
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When asked what is driving China’s rapid progress in BCI, Peng told TechCrunch that there are four factors. The first is strong political support with cross-departmental collaboration that aligns technical standards and medical reimbursement. In December, at the 2025 Shenzhen BCI & Human-Computer Interaction Expo, China announced an 11.6 billion yuan ($165 million) Brain Science Fund to support BCI companies from research through commercialization.
A second factor is extensive clinical resources, including large patient populations and lower research costs, which accelerate studies. China’s national health insurance means faster commercialization once the state approves the device. This is comparable to the US, where even after the FDA approves a device, private insurers as major payers must each do so individually. Europe is known for applying the strictest approval standards in the field of medical technology with an emphasis on the regulation of personal data protection.
Researchers have completed the nation’s first fully implanted wireless BCI trial — only the second worldwide — allowing a paralyzed patient to control the device without external hardware, according to CGTN. Neuralink is a startup that has completed the first such trial.
“In traditional electrical BCIs, Chinese firms have made clinical progress in motor 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 approaches such as Gestala’s.
A third factor is China’s advanced industrial manufacturing, Peng points out, including semiconductors, AI and medical hardware, which supports rapid R&D and prototyping. Finally, there are strategic investments in the market, with both state-led funds and private capital growing rapidly as part of national initiatives.
Some recent key deals include Shanghai-based BCI startup StairMed Technology, which raised $48 million (350 million yuan) in Series B funding in February 2025. BrainCo, a neurotechnology company developing its non-invasive BCIs and bionic limbs, has also quietly filed for an IPO in Hong Kong after raising $287 million (2 billion) this year, according to reports. Peng’s company Gestala, which launched in January, is in talks with investors to close an angel round soon, he tells us.
Bottom line, Chinese BCI startups are growing to challenge US leaders like 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 cover approaches from implantable flexible interfaces to non-invasive brain and computer technologies.
That means China’s BCI market was 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 projections putting the market at more than 120 billion yuan by 2040.
BCI types
BCIs follow two paths. The first are invasive electrophysiological BCIs such as NeuroXess and Neuralink, which implant electrodes into human brains for precise signals at the neuronal level. But this type comes with surgical risks. The second type are non-invasive systems like NeuroSky and BrainCo, which trade some accuracy for safety and ease of use.
The field is now expanding further, with new approaches emerging—including ultrasound, magnetoencephalographic imaging, transcranial magnetic stimulation, optical methods, and hybrid BCIs—providing researchers with new tools to read and influence brain activity.
Startup founders also hope the non-invasive technology could help overcome barriers to adoption. Not everyone is willing to undergo brain surgery to have a device implanted in their head.
Ultrasound BCIs from companies like OpenAI backed by Merge Labs and Gestala are targeting high prevalence conditions such as chronic pain, stroke and depression. As a non-invasive solution, these technologies are more easily accepted by patients and offer significantly greater commercial scalability.
Gestala, for example, expects to launch its first-generation product by Q3, its founder said. Early clinical trials showed promising results: One session reduced pain scores by 50%, with effects lasting one to two weeks, Peng noted.
HongShan Capital, formerly Sequoia China, has invested in Zhiran Medical, a startup founded in 2022 focused on improving the long-term performance of implants. The company uses flexible, high-performance electrodes to reduce inflammation and signal loss associated with rigid implants.
“Some technologies may look cutting-edge, but they are far from being practical,” Yang Yunxia, a partner at HongShan Capital, wrote in a blog post. While others appear commercially viable, they face “high costs” or significant technical hurdles, Yunxia says. The investment decision ultimately depends on whether the investor believes the product can be developed into a sustainable business, the partner noted.
Years ahead
Over the next five years, industry experts expect China’s BCI regulations to become more aligned 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 guidelines from 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 that all BCI devices generate, while making it easier to approve non-invasive technologies.
Regarding the ethics facing brain-implanted devices or manipulation, China plans to strengthen informed consent requirements, expand ethical review beyond medicine, and move toward uniform technical standards for clinical evaluation.