While Elon Musk’s Neuralink likes to say that it’s “innovative“Brain-computer interfaces (BCI), China’s BCI industry is already quietly moving from research to scale.
A new wave of startups is racing to commercialize implantable, non-invasive BCIs, backed 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 co-founder of NeuroXess, manufacturer of BCI implants, as well as founder and CEO of non-invasive ultrasound BCI startup Gestala.
Its conviction in the potential of this market is based on concrete actions: provinces such as Sichuan, Hubei and Zhejiang have already set the price of medical services for BCI, accelerating its inclusion in the national health insurance system.
Over time, he predicts the technology will expand beyond medicine to “treating disease” to “human augmentation,” he said.
“I have always maintained that neuroscience and AI are two sides of the same coin,” Peng said. “They are intended for deep integration, achieving direct, high-bandwidth connections between the human brain and AI. BCI will serve as the ultimate bridge between carbon-based and silicon-based intelligence. Although this may seem far away, it represents a market of unimaginable scale in the future.”
Four determining factors of BCI in China
But over the next three to five years, BCI use will likely remain concentrated in the healthcare sector, with the market growing to several billion dollars as insurance coverage expands, Peng told TechCrunch.
In August 2025, China’s Ministry of Industry and six other agencies published a national roadmap to further accelerate the development of BCIs. The plan targets major technical milestones by 2027, common industry standards and a complete supply chain by 2030, with the aim of creating globally competitive BCI businesses and supporting small specialist businesses.
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When asked what’s driving China’s rapid progress in BCI, Peng told TechCrunch it comes down to four factors. The first is strong policy support, with cross-departmental collaboration that aligns technical standards and medical reimbursement. In December, at the 2025 Shenzhen BCI & Human-Computer Interaction Expo, China announcement an 11.6 billion yuan ($165 million) brain science fund to support BCI companies from research to commercialization.
The second factor is vast clinical resources, including large patient pools and lower research costs that accelerate trials. China’s national health insurance allows for faster commercialization once the state approves a device. This compares to the situation in the United States, where even after the FDA approves a device, private insurers, as the primary payers, must each do so individually.
Researchers have completed the nation’s first fully implanted wireless BCI trial – only the second in the world – allowing a paralyzed patient to control devices without external hardware. for CGTN. Neuralink is the startup that completed THE first attempt of this type.
“In traditional electrical BCIs, Chinese companies have made clinical progress in motor and language decoding, spinal cord reconstruction and stroke rehabilitation, with more than 50 clinical trials of flexible implantable BCIs 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 Gesture‘s.
The third factor is the maturity of China’s manufacturing industry, Peng points out, which covers semiconductors, AI and medical equipment, which enables rapid R&D and prototyping. Finally, there are strategic investments in the market, with a sharp increase in public funds and private capital through national initiatives.
Some recent key deals include Shanghai-based startup BCI StaircaseMed Technology 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, also quietly has filed for an IPO in Hong Kong, according to reports, after raising $287 million (2 trillion yuan) earlier this year. Peng’s company, Gestala, launched in January, is in talks with investors to close an angel funding round soon, he tells us.
In total, Chinese BCI startups are mobilizing to challenge American leaders like Neuralink, Synchron and Paradromics. Among the most active players in China are NeuroXess, Neuracle, NeuralMatrix, BrainCo, Bo Rui Kang Tech, Aoyi Tech, Brainland Tech and Zhiran Medical. They cover approaches ranging from implantable flexible interfaces to non-invasive brain-computer technologies.
This means that China’s BCI market is expected to reach over $530 million (3.8 billion yuan) in 2025, up from 3.2 billion yuan in 2024. according to the media, with projections bringing the market to over 120 billion yuan by 2040.
Types of BCI
BCIs take two paths. The first is invasive electrophysiological BCIs like NeuroXess and Neuralink that implant electrodes in people’s brains for precise signals at the neuron level. But this type carries surgical risks. The second type concerns non-invasive systems like NeuroSky And BrainCo which trade some accuracy for security and ease of use. (These devices – usually headsets or headbands using electroencephalography (EEG) – read electrical activity through the skull.)
The field is now expanding further, with emerging approaches – 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 that non-invasive technology could help overcome adoption barriers. Not everyone is willing to undergo brain surgery to have a device implanted in their head.
Ultrasonic BCI from companies like Merge Labs backed by OpenAI and Gestala target high prevalence conditions such as chronic pain, stroke and depression. As non-invasive solutions, these technologies are more easily accepted by patients and offer significantly greater commercial scalability.
Gestala, for example, plans to roll out its first-generation product by the third quarter, Peng said. Early clinical trials have shown promising results, he added, saying a single session reduced pain scores by 50%, with effects lasting one to two weeks.
HSG, formerly Sequoia China, has invested in Zhiran Medical, a startup founded in 2022 focused on improving long-term implant performance. The company uses high-flow flexible electrodes to reduce inflammation and signal loss associated with rigid implants.
“Some technologies may seem cutting-edge, but are far from being applied in practice,” said Yang Yunxia, partner at HSG. wrote in a blog post. Even if others appear commercially viable, they face “high costs” or significant technical hurdles, Yunxia said. Ultimately, investment decisions depend on the investor’s belief that a product can become a sustainable business, the partner noted.
The years to come
Over the next five years, industry players 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 CIS And ISOaccompanied by advice from The United States Food and Drug Administration (FDA), should serve as key reference points.
Chinese regulators should also strengthen oversight of invasive devices, as well as data generated by all BCI devices, while making it easier to approve non-invasive technologies.
As for ethics Faced with brain-implanted or manipulated devices, China plans to strengthen informed consent requirements, expand ethical review beyond medicine, and move toward unified technical standards for clinical evaluation.
