While Elon Musk’s Neuralink often claims to be pioneering brain-computer interfaces, 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, backed by stronger policy support, expanding clinical trials, and growing investor interest.
This view comes from Phoenix Peng, who has founded not one, but two BCI startups. He is a co-founder of NeuroXess, a maker of BCI implants, as well as the founder and CEO of Gestala, a noninvasive ultrasound BCI startup. His belief in the market’s potential is grounded in concrete action. Provinces such as Sichuan, Hubei, and Zhejiang have already set medical service pricing for BCI, speeding its inclusion in the national medical insurance system. Over time, he foresees the technology extending beyond medicine for treating disease to applications for human augmentation.
“I have always maintained that neuroscience and AI are two sides of the same coin. They are destined for deep integration, realizing direct high-bandwidth connections between the human brain and AI. BCI will serve as the ultimate bridge between carbon-based and silicon-based intelligence. While this may sound distant, it represents an unimaginably vast market in the future,” Peng said.
Over the next three to five years, BCI use is likely to stay concentrated in healthcare, with the market reaching multibillion-dollar scale as insurance coverage expands. In August 2025, China’s industry ministry and six other agencies released a national roadmap to further speed development of BCIs. The plan targets major technical milestones by 2027, common industry standards, and a full supply chain by 2030, with the goal of building globally competitive BCI companies and supporting smaller specialized firms.
Asked what is driving China’s rapid progress in BCI, Peng points to four factors. The first is strong policy support, with cross-department collaboration that aligns technical standards and medical reimbursement. In December 2025, China announced an 11.6 billion yuan brain science fund to support BCI companies from research through commercialization.
The second factor is vast clinical resources, including large patient pools and lower research costs that accelerate trials. China’s national health insurance means quicker commercialization once the state approves a device. This contrasts with the U.S., where even after FDA approval, private insurers must individually agree to cover a device. Researchers have completed the country’s first fully implanted, wireless BCI trial, only the second globally, allowing a paralyzed patient to control devices without external hardware. Neuralink completed the first such trial.
“In traditional electrical BCIs, Chinese firms have achieved clinical progress in motor and language decoding, spinal cord reconstruction, and stroke rehabilitation, with over 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.
The third factor is China’s mature industrial manufacturing, spanning semiconductors, AI, and medical hardware, which supports fast research and development and prototyping. Finally, there is strategic investment in the market, with both state-led funds and private capital surging under national initiatives.
Some recent key deals include Shanghai-based BCI startup StairMed Technology raising $48 million in Series B funding in February 2025. BrainCo, a neurotech company developing noninvasive BCIs and bionic limbs, has also quietly filed for a Hong Kong IPO after raising $287 million earlier in the year. Peng’s company Gestala, which launched in January, is in talks with investors to close an angel round soon.
All told, China’s BCI startups are ramping up to challenge U.S. 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 span approaches from implantable flexible interfaces to noninvasive brain-computer technologies.
This means China’s BCI market was expected to grow to more than $530 million in 2025, up from 3.2 billion yuan in 2024, with projections putting the market at over 120 billion yuan by 2040.
BCIs are taking two main paths. The first is invasive electrophysiological BCIs like those from NeuroXess and Neuralink that implant electrodes in the brain for precise neuron-level signals, but this comes with surgery risks. The second type is noninvasive systems like those from NeuroSky and BrainCo that trade some precision for safety and ease of use.
The field is now broadening further with emerging approaches, including ultrasound, magnetoencephalography imaging, transcranial magnetic stimulation, optical methods, and hybrid BCIs, giving researchers new tools to read and influence brain activity. Startup founders hope that noninvasive technology could help overcome adoption barriers, as not everyone is willing to undergo brain surgery.
Ultrasound BCIs from companies like OpenAI-backed Merge Labs and Gestala are targeting high-prevalence conditions such as chronic pain, stroke, and depression. As noninvasive solutions, these technologies are more readily accepted by patients and offer significantly greater commercial scalability. Gestala, for instance, expects to roll out its first-generation product by the third quarter. Early clinical trials have shown promising results, with a single session reducing pain scores by fifty percent, with effects lasting one to two weeks.
HongShan Capital, formerly Sequoia China, has invested in Zhiran Medical, a startup founded in 2022 focused on improving long-term implant performance. The company uses flexible, high-throughput electrodes to reduce inflammation and signal loss associated with rigid implants.
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 the IEC and ISO, along with guidance from the U.S. Food and Drug Administration, are expected to serve as key reference points. Chinese regulators are also expected to tighten oversight of invasive devices and the data all BCI devices generate, while easing approval for noninvasive technologies.
Regarding the ethics that confront brain-implanted or manipulating devices, China plans to strengthen informed-consent requirements, broaden ethics review beyond medicine, and move toward unified technical standards for clinical evaluation.