{"id":3094296,"date":"2026-02-22T08:00:00","date_gmt":"2026-02-22T16:00:00","guid":{"rendered":"https:\/\/techcrunch.com\/?p=3094296"},"modified":"2026-02-23T11:14:05","modified_gmt":"2026-02-23T19:14:05","slug":"chinas-brain-computer-interface-industry-is-racing-ahead","status":"publish","type":"post","link":"https:\/\/techcrunch.com\/2026\/02\/22\/chinas-brain-computer-interface-industry-is-racing-ahead\/","title":{"rendered":"China’s brain-computer interface industry is racing ahead"},"content":{"rendered":"\n

While Elon Musk’s Neuralink likes to say it’s “pioneering<\/a>” brain-computer interfaces (BCIs), China\u2019s BCI industry is already quietly moving from research to scale.<\/p>\n\n

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. So says Phoenix Peng, who has founded not one but two BCI startups. He\u2019s a co-founder of NeuroXess, maker of BCI implants, as well as founder and CEO of noninvasive ultrasound BCI startup Gestala.<\/p>\n\n

His belief in the potential of this market is founded on concrete action: Provinces such as Sichuan, Hubei, and Zhejiang have already set medical service pricing<\/a> for BCI, speeding its inclusion in the national medical insurance system.<\/p>\n\n

Over time, he foresees the technology extending beyond medicine \u201ctreating disease\u201d to \u201chuman augmentation,\u201d he said.<\/p>\n\n

\u201cI have always maintained that neuroscience and AI are two sides of the same coin,\u201d Peng said. “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.\u201d <\/p>\n\n

Four factors driving BCI in China<\/h2>\n\n

But 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, Peng told TechCrunch. <\/p>\n\n

In August 2025, China\u2019s industry ministry and six other agencies released a national roadmap<\/a> 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.<\/p>\n

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Asked what\u2019s driving China\u2019s rapid progress in BCI, Peng told TechCrunch it comes down to four factors. The first one is strong policy support, with cross-department collaboration that aligns technical standards and medical reimbursement. In December, at the 2025 Shenzhen BCI & Human-Computer Interaction Expo, China announced<\/a> an 11.6 billion yuan ($165 million) brain science fund to support BCI companies from research through commercialization.<\/p>\n\n

The second factor is vast clinical resources, including large patient pools and lower research costs that accelerate trials. China\u2019s national health insurance means quicker commercialization once the state approves a device. This compares to the U.S. where even after the FDA approves a device, private insurers, as the main payers, must each individually do so. <\/p>\n\n

Researchers have completed the country\u2019s first fully implanted, wireless BCI trial \u2014 only the second globally \u2014 allowing a paralyzed patient to control devices without external hardware, per CGTN<\/a>. Neuralink is the startup that completed<\/a> the first such trial<\/a>.<\/p>\n\n

\u201cIn 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,\u201d Peng said, adding that next-generation efforts are now moving toward whole-brain neural decoding and encoding, including ultrasound-based approaches such as Gestala<\/a>\u2019s.<\/p>\n\n

The third factor is China\u2019s mature industrial manufacturing, Peng points out, spanning semiconductors, AI, and medical hardware, which supports fast R&D and prototyping. Finally, there is strategic investment in the market, with both state-led funds and private capital surging under national initiatives.<\/p>\n\n

Some recent key deals include Shanghai-based BCI startup StairMed<\/a> Technology raising $48 million (350 million yuan) in Series B funding in February 2025. BrainCo, a neurotech company developing its noninvasive BCIs and bionic limbs, has also quietly<\/a> filed for a Hong Kong IPO, according to reports, after raising $287 million (2 billion yuan)<\/a> earlier this year. Peng\u2019s company, Gestala, which launched in January, is in talks with investors to close an angel round soon, he tells us. <\/p>\n\n

All told, China\u2019s BCI startups are ramping up to challenge U.S. leaders like Neuralink, Synchron, and Paradromics. Among the most active players<\/a> 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.<\/p>\n\n

This means that China\u2019s 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<\/a>, with projections<\/a> putting the market at over 120 billion yuan by 2040.<\/p>\n\n

BCI types<\/strong><\/h2>\n\n

BCIs are taking two paths. The first is invasive electrophysiological BCIs like NeuroXess and Neuralink that implant electrodes in people’s brains for precise neuron-level signals. But this type comes with surgery risks. The second type is noninvasive systems like NeuroSky<\/a> and BrainCo<\/a> that trade some precision for safety and ease of use. (These devices \u2014 typically headsets or headbands using electroencephalography (EEG) \u2014 read electrical activity through the skull.)<\/p>\n\n

The field is now broadening further, with emerging approaches \u2014 including ultrasound, magnetoencephalography imaging, transcranial magnetic stimulation, optical methods, and hybrid BCIs \u2014 giving researchers new tools to read and influence brain activity. <\/p>\n\n

Startup founders also hope that noninvasive technology could help overcome adoption barriers. Not everyone is willing to undergo brain surgery to have a device implanted in their heads.<\/p>\n\n

Ultrasound BCIs from companies like OpenAI-backed Merge Labs<\/a> 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.<\/p>\n\n

Gestala, for instance, expects to roll out its first-generation product by Q3, said Peng. Early clinical trials have shown promising results, he added, saying that a single session reduced pain scores by 50%, with effects lasting one to two weeks.<\/p>\n\n

HSG, formerly Sequoia China, has meanwhile 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.<\/p>\n\n

\u201cSome technologies may look cutting-edge but far from practical application,\u201d Yang Yunxia, a partner at HSG, wrote in a blog post<\/a>. While others appear commercially viable, they face \u201chigh costs\u201d or significant technical barriers, Yunxia contended. Ultimately, investment decisions come down to whether the investor believes a product can be developed into a sustainable business, the partner noted.<\/p>\n\n

The years ahead <\/h2>\n\n

Over the next five years, industry insiders expect China\u2019s 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<\/a> and ISO<\/a>, along with guidance from the U.S. Food and Drug Administration (FDA<\/a>), are expected to serve as key reference points. <\/p>\n\n

Chinese regulators are also expected to tighten oversight of invasive devices, as well as the data that all BCI devices generate, while easing approval for noninvasive technologies.<\/p>\n\n

As for the ethics<\/a> 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.<\/p>\n","protected":false},"excerpt":{"rendered":"

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